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AIFM - SME Petition Letter 200410
AIFM - SME Petition Letter 200410
AIFM - SME Petition Letter 200410
I write on behalf of my peers and co-signatories, who are the owners and managers of small
and medium sized enterprises from across the EU. SMEs form the bedrock of economic
activity across Europe and their ability to generate jobs and contribute to wider growth and
prosperity is critical in meeting the goals of the EU’s 2020 Strategy. It is from this fertile
breeding ground of innovation that the European and international leaders of tomorrow will
emerge.
Growth businesses require access to long term sources of finance. In the present climate,
such finance is scarce, but one important source is private equity and venture capital. These
long-term investors provide the capital and expertise necessary to nurture businesses and to
propel them on to the next stage in their development.
Of particular concern are proposed disclosure obligations for private equity and venture-
backed businesses. We do not oppose increased transparency across Europe whatever the
type of company or sector it operates within. At the same time, we believe there should be a
level playing field for all. We do not see why the law should discriminate against different
types of privately owned companies. We do not see why there should be one set of rules for
private equity and venture-backed businesses and a different set of rules for their competitors
just because of other types of ownership – whether owned by families, oligarchs or large
conglomerates. If protections are necessary, they should be afforded to stakeholders of all
private businesses, and dealt with through horizontal company law.
Compounding this are proposals to disclose matters which are for the board of a company to
determine, such as information related to the development or research policy of a company.
Measures which call for unequal levels of disclosure would be
particularly damaging to venture-backed companies that have invested heavily in product
development and whose ideas may be exploited by much larger rivals, stifling competition.
Finally, we are very concerned that the initial Commission proposal to exclude smaller
businesses from these provisions (below 250 employees) has been watered down in some
proposals to companies with less than 50 employees (Articles 26 to 30). This shows no
understanding of the resource requirements of very early-stage companies at a vulnerable
stage in their corporate development. Rather than protecting them, such new administrative
burden would weaken SMEs.
The cost of complying with the proposed disclosure would be around €30,000 per year – a
very significant outlay for SMEs. The compliance costs and excessive capital requirements of
this Directive will also have a major impact on venture capital firms themselves, and will
radically reduce their ability to back SMEs in the future, while increasing the barriers to entry
for new venture capital funders to emerge. This is an outcome at direct odds with numerous
Commission financed initiatives to promote venture capital.
Much of the chatter around this Directive has focused on the impact on hedge funds, but it is
a big mistake to think that the AIFMD’s impact will be restricted to companies trading in
arcane financial instruments. This is about the real economy, and these proposals will directly
affect tens of thousands of companies across every sector, from fashion to photovoltaics, and
from sandwich making to waste recycling.
Innovative businesses will be central to Europe’s recovery and sustainable economic growth.
We urge policymakers to ensure all companies are treated fairly, to recognise the fragility of
high potential businesses during certain phases of their development, and to ensure that the
AIFMD proposals take into account the vital role played by private equity and venture capital
in this process.
Yours sincerely,
Co-signatories:
17. Denis Payre, Kiala N.V. and Kiala SAS, Belgium and France
106. Michael Kowalzik, Tyntec GMBH and Tyntec Ltd., Germany and the United Kingdom
137. Andreas Gerber, xaitment GmbH and xaitment Inc, Germany and USA
183. Raul Miguel Gonçalves and Morais dos Santos, Crioestaminal - Saúde e Tecnologia,
SA, Portugal
195. Javier Garcia del Valle, HappyTour Corporate Travel Management SRL, Romania
216. Alfredo Díaz, Grupo Gestión Integral Novolux Internacional S.L., Spain
233. Emil Eifrém, Networks Engine for Object in Lund Ab, Sweden
234. Lars-Olov Liss, Åkerströms Björbo AB, Sweden
305. Peter van Vlijmen, Axa Stenman Group BV, The Netherlands
310. Wim van den Bogerd, Itho Group BV, The Netherlands
315. P.M.H. Rutten, Vialle Alternative Fuel Systems B.V., The Netherlands
336. Bart Wijers and Mario Smit, Terra Sports Technology BV, The Netherlands
342. F. Tugba Unkan, Hardy Amies London Limited, The United Kingdom
366. Roy Darren Cunningham, Sure Maintenance Ltd., The United Kingdom
370. Alexander Berté and Marie Burak, Talk24 Limited, The United Kingdom
380. Frank Sagnier, Power Challenge Holding Ltd, The United Kingdom
385. David Smith, Public Safety Equipment (Intl) Ltd, The United Kingdom
386. Andrew Butler, Whittan Storage Systems, The United Kingdom and Spain
387. Kevin Grant, IT2 Treasury Solutions Ltd, The United Kingdom
388. Jason M J Bailey, Five Valleys Aerospace Ltd, The United Kingdom
390. Alastair Mitchell and Andy McLoughlin, Huddle, The United Kingdom
392. Benedict Enweani and Leo Zancani, Ontology Systems, The United Kingdom
399. Geoff McMillan, Speciality European Pharma Ltd, The United Kingdom
404. Barry Clare, Healthcare Brands International Ltd, The United Kingdom
425. Jesse Guy Watts, Right4Staff Holdings Ltd, The United Kingdom
426. Andrew Cope, Zenith Vehicle Contracts Limited, The United Kingdom
427. Graham Worsfold, DigiPos Store Solutions Limited, The United Kingdom
430. Brent Hoberman and David Kelly (former CEO), MyDeco, The United Kingdom
431. Carl Symon, Richard Turner and Terry Davies, Clearswift Ltd, The United Kingdom
439. Graham Mackie, Road Angel Group Limited, The United Kingdom
461. Geraldine Wilson and Coen van Breda, Software Cellular Network Limited
(Truphone), The United Kingdom
469. Mark Andrew Hogg, IFE Services Limited, The United Kingdom
473. Dan Daly, Lein Applied Diagnostics Ltd, The United Kingdom
475. Paul Beaumont, FST Technologies Holdings Ltd, The United Kingdom