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Dörte Höppner, EVCA Chief Executive, says: “Venture capital finances innovation. It is the engine driving the growth of companies such as Spotify, Delivery Hero and Farfetch. To deliver more of these successes in Europe, the European Commission is right to place VC funding high on its Capital Markets Union priority list.”
The CMU Action plan, officially released today by Commissioner Jonathan Hill, highlights possible improvements to existing venture capital fund management regulation (EuVECA) and the creation of pan-European venture capital ‘funds-of-funds’ as possible mechanisms for increasing the flow of capital into high-growth businesses.
The action plan also promises to address currently inappropriate risk-weighting requirements within Solvency II for infrastructure investments and to review their application to the private equity asset class - recognising the crucial role of insurance groups in backing these long-term investments.
Höppner adds: “The Commission’s recognition of the role of insurance companies in providing private capital to finance growth is to be welcomed. Its intention to revise the Solvency II regulatory risk weights could facilitate greater investment in key services such as airports, energy and schools and we would like to see this extended to cover both direct and indirect infrastructure investments.”