BAI Managing Director Frank Dornseifer assesses the package of measures as follows: "Our view that the AIFM Directive has proven itself in practice is fully shared by the EU Commission. In the pre-consultation, we had therefore firmly argued that selective improvements and modifications could be reasonable whereas a broad review would simply be counterproductive. In the context of retirement provision, insurers, pension funds, pension schemes etc. now allocate around one third of their funds via AIFs and the trend is rising as the current BAI Investor Survey 2021 shows. Infrastructure projects, real estate, medium-sized companies, etc. are financed. The industry has a preeminent role to play in financing the green deal and the digital transformation. For this reason alone, it must be ensured that the regulatory framework for AIFs is wisely improved."
The BAI positively evaluates, for example, the proposed consolidation or simplification of reporting, or the opening of cross-border activities for depositaries. The BAI also understands that the European Commission is taking up the concerns of the supervisors, such as the specification of the minimum requirement with regard to delegation, especially in the case of third countries (no letter-box entities) and liquidity management.
From the BAI's point of view, the proposal to introduce an EU-wide regime for loan-originating AIFs was and remains controversial. Dornseifer went on to comment on this: "There was no deficit or the like here that should have been remedied, but an EU-wide harmonized regulatory framework also has advantages for providers, some of whom had to contend with market fragmentation in cross-border lending. Private debt will also continue to grow dynamically. Our Investor Survey this year confirms the increasing demand from institutional investors on the one hand. On the other hand, the financing needs of SMEs and infrastructure are increasing. The proposals now presented by the EU Commission could therefore provide important impetus, but it will be important that the actual design and implementation is not thwarted in the end, as for example in Germany, where a largely unrelated alignment with banking supervision law once again nipped the topic of loan funds in the bud.”
The review of the ELTIF Regulation also finds positive resonance with the BAI. For example, the investment possibilities for ELTIFs are to be expanded or made more flexible (introduction of fund of funds/master fund structures, admission of minority shareholdings, increase of the market capitalization threshold for listed shareholdings, etc.), especially for ELTIFs that are exclusively marketed to professional investors. At the same time, however, the investment opportunities for private investors are to be readjusted because they also need access to well-regulated longer-term investment products in the fund shell.
Frank Dornseifer explained further: "This flexibilization of investment options and the differentiation between ELTIFs for professional and those for private investors are based on suggestions from the industry after the ELTIF has initially not been accepted in practice. Last year, we saw a certain momentum and the number of ELTIFs approved doubled, but certain regulations were very unwieldy and a uniform set of regulations for professional and private investors only works in the rarest of cases. Finally, we take a positive view of the proposals to make redemptions more flexible, e.g., via a redemption platform for ELTIF units. It is these selective proposals for improvement that could ultimately help the ELTIF to achieve a breakthrough.
In addition to the above-mentioned legislative acts, the SME package of measures also includes proposed amendments to the MiFIR Regulation and the cross-sector introduction of a central digital platform for investment-relevant corporate information of a financial and non-financial nature (European Single Access Point).
Bundesverband Alternative Investments e.V. (BAI)
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