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As part of an action plan designed to boost access to finance for small and medium-sized businesses, the European Commission has proposed a number of measures aimed at boosting the amount of money channelled by venture capital funds.
Among the most significant of the proposals is a plan to reform the “passport” regime introduced as part of the Alternative Investment Fund Managers Directive in 2008 that allows fund managers to market and raise capital on a pan-European basis.
Currently, a manager needs to have a minimum of €500 million in assets under management to qualify for the passport. While this would remain under the new proposals, venture capital firms would have simpler registration and reporting requirements. This would open up the sector to a wider group of investors, including high net worth individuals.
The aim, the report said, is to “reduce fragmentation of the venture capital markets along national lines that prevent cross-border operations and limit the supply of venture capital”.
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