Further criticisms have been made against the directive for hedge funds and private equity from the EU in a letter from Dutch pension funds.
Published in April, the draft directive “Alternative Investment Fund Managers” directive, hoped to lead to increased information disclosure and transparency in private equity and hedge fund firms. However it has come under a number of criticisms, the latest of which is from the Dutch pension managers.
In a letter, from numerous Dutch pension firms including APG, PGGM, and Mn Services concerns are expressed that; elements included in the current Proposal may reduce investment opportunities and risk diversification, lead to higher cost and lower returns. The letter is addressed to the European Commission and dated August 27.
The letter goes on to pose more specific questions about the impact of the directive. These include the extra costs falling on investors, the limitation of investment choice, increased risk of using EU credit institution depositaries, and the lack of distinction between different types of investment fund. One key point made was towards to relevance of aspects of the directive, the letter questioned whether professional investors need or want further protection.
Criticisms have already been made about the haste with which the EU draft was put together by other European organizations, which the letter references, although these have been expressed to the EU separately.
The Dutch pension managers concluded by offering, to provide more detailed comments and their hopes to contribute to a broad consultation and effective impact analysis from an institutional investors’ point of view.
A copy of letter is available in full here
Sarah Keane