European venture capital and social enterprise funds

12-10-2016

The evidence available shows that a variety of reasons may be behind the lack of take-up of EuVECA and EuSEF. Some issues may relate to the venture capital market in Europe as a whole: its limited size and historic lack of returns. However, given the better take-up of schemes under the AIFMD for example, there are clearly some specific issues linked to the two schemes in question. The proposed amendments look to go some way to address a number of the key issues highlighted by stakeholders, in particular, the inconsistent implementation of the regulations. However, the regulations have only been in force for a relatively short period of time which makes it difficult to assess any long-term impacts of the schemes. A lack of quantitative data also somewhat hampers the assessment which is mostly based on consultations with those stakeholders who have engaged in these Commission initiatives. To ensure that all potential barriers to take-up were explored, a greater effort could have been made to capture stakeholder feedback, particularly from potential investees, i.e. start-ups and other small businesses as well as from those currently managing funds registered under EuVECA and EuSEF. Although the proposal clearly sets out the need for an early review, for consistency, a broader evaluation including all statutory review undertakings may have provided a clearer overview and placed these investment schemes more clearly within the wider context of all collective investment tools. While the consultations and current review covered most of the areas flagged up by Parliament for evaluation, it will be important to ensure that the right monitoring tools continue to stay in place to monitor the up-take of the schemes, and what impact changes to the schemes may have on investors and investees as well as on the geographical spread of venture capital in the EU. Please click here for the full publication in PDF format

The evidence available shows that a variety of reasons may be behind the lack of take-up of EuVECA and EuSEF. Some issues may relate to the venture capital market in Europe as a whole: its limited size and historic lack of returns. However, given the better take-up of schemes under the AIFMD for example, there are clearly some specific issues linked to the two schemes in question. The proposed amendments look to go some way to address a number of the key issues highlighted by stakeholders, in particular, the inconsistent implementation of the regulations. However, the regulations have only been in force for a relatively short period of time which makes it difficult to assess any long-term impacts of the schemes. A lack of quantitative data also somewhat hampers the assessment which is mostly based on consultations with those stakeholders who have engaged in these Commission initiatives. To ensure that all potential barriers to take-up were explored, a greater effort could have been made to capture stakeholder feedback, particularly from potential investees, i.e. start-ups and other small businesses as well as from those currently managing funds registered under EuVECA and EuSEF. Although the proposal clearly sets out the need for an early review, for consistency, a broader evaluation including all statutory review undertakings may have provided a clearer overview and placed these investment schemes more clearly within the wider context of all collective investment tools. While the consultations and current review covered most of the areas flagged up by Parliament for evaluation, it will be important to ensure that the right monitoring tools continue to stay in place to monitor the up-take of the schemes, and what impact changes to the schemes may have on investors and investees as well as on the geographical spread of venture capital in the EU. Please click here for the full publication in PDF format