24 OCT 2010
By Steve Johnson | Financial Times
Development agencies and other investors focused on emerging markets still have “grave” concerns over the impact of the European Union’s Alternative Investment Fund Managers directive.
The draft version of the directive agreed by EU finance ministers last week proposes scrapping the existing private placement regime by 2018.
This is the regime whereby private equity and hedge fund managers apply to national authorities individually to sell into their domestic markets.
Instead, non-EU managers would have to apply for a passport to market across the 27-member bloc, something only likely to be granted to funds that comply with new EU rules on remuneration, leverage and depositaries, based in countries with “regulatory equivalence” with Europe.
However, while investors in emerging market private equity funds have welcomed the temporary reprieve, they fear some countries – often those where investment is most needed – will struggle to comply with new rules.
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