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EVCA welcomes EC green paper on long-term investing

The European Private Equity and Venture Capital Association has welcomed the European Commission’s new green paper on long-term investing and says it is looking forward to playing a full part in the debate the paper’s publication has begun.

According to the ECVA, much in the way of current regulation can discourage investors from allocating capital to long-term ventures. The use of current accounting standards to measure risk in long-term asset classes can also be inappropriate; artificial volatility is created in asset classes, such as private equity, which are designed to be held by investors until maturity.
The ECVA also believes that while the proposal for a long-term investment fund vehicle is helpful it requires much work. While useful, this proposal should not detract from getting existing regulation right for long-term investors.
EVCA secretary-general Dörte Höppner says: “Pension funds and insurers need access to private equity funds to help meet future liabilities. The economy, and the companies that drive it, need the patient capital that long-term investors can provide via private equity and venture capital firms.
“It is a positive development that the green paper recognises these challenges and the EVCA looks forward to addressing these issues in the coming months.
“The EVCA also welcomes the specific attention given to venture capital in the green paper: 40 per cent of funding for the industry now comes from the public sector. It is critical for the future of the European economy that long-term investors such as pension funds and insurance companies can also invest in the Europe’s high-growth, innovative businesses.”

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