Interview: EU law set to discriminate against private equity[fr][de] 

"We are not against regulation, but it has to be fair," Echarri said, complaining that an EU draft directive on alternative investment funds will hit private equity firms in a disproportionate manner in comparison with other financial actors, further damaging the credit market "when most European companies are in desperate need for capital".

"It discriminates [against] companies just because they are private equity and venture capital-backed companies, particularly in relation to disclosure. It discriminates private equity investors vis-à-vis sovereign wealth funds or Richard Branson [the English billionaire, best known for his Virgin brand] when he buys companies, or family businesses," he said.

Amid fierce criticism of private equity from the European Socialist Party and lukewarm defence by the Conservatives in the European Parliament, Echarri repeatedly stated that private equity firms are fundamentally sound businesses and have no responsibility for the current financial crisis.

Despite many having criticised the directive for having largely spared hedge funds and private equity investments from tighter regulation (EurActiv 30/04/09), Echarri believes that the draft rules went too far by proposing "inappropriate" provisions, including limits on leverage or artificial and ineffective thresholds for exemption from the new regulatory regime.

He reckons that around 70% of the industry will have to comply with the new burdensome requirements. Small companies will be affected too, he said: "There will be the same range of constraints on small companies as on big ones."

EVCA is poised to fight hard in Brussels to get the draft directive amended before it is approved by the Parliament and member states. However, unlike some hedge funds, which are planning to build up a specific fund to lobby the European institutions, EVCA will continue to tread its own path.

"What we need most are people who get engaged from our companies and go to talk to people in their countries, with politicians and the press. I don't think it is a question of financial resources. We have it already and we have always had them," said Echarri.

To read the interview in full, please click here.