Legal & Regulatory Bulletin – Issue No. 7, Autumn 2012

letter from the chairman

This issue of the Legal and Regulatory Bulletin follows on a full week of very well attended and highly engaging EMPEA summits in London in late October. The topic of risk figured prominently during many of the sessions, with commentary ranging from tactical suggestions for identifying and managing various investment risks to Celtel founder Mo Ibrahim’s rousing call to action, urging the audience to tackle corruption head on in the markets where their companies and firms invest.

The guidance shared in these pages touches on both the ways in which risks might manifest in a transaction and the recommended approaches for addressing those risks. In an EMPEA webcast hosted by Kroll Advisory Solutions and featuring insights from Aureos, IFC, Investec Asset Management and Norton Rose, summarized here, panelists shared their practical perspectives on risks in the due diligence process. In a piece co-authored by the team at Clifford Chance and ECP’s Carolyn Campbell, we can see how risk mitigants ranging from bilateral investment treaties to political risk insurance can and have been employed to protect investors’ interests.

In addition to the endogenous risks of a transaction, private equity investors must also contend with the exogenous changes that impact the markets where they operate, such as the recent changes to the fund marketing regimes in the United Arab Emirates and Kuwait, summarized here by SJ Berwin’s Benjamin Aller. Pleas to the authorities—including those from EMPEA—that the new rules would make it very difficult for foreign funds to be marketed were noted but largely unheeded.

The regrettable consequences from regulatory developments such as these were the impetus behind the creation of the EMPEA Legal and Regulatory Guidelines. We continue to work to foster more informed approaches to regulation by educating influencers about the Guidelines. As part of these efforts, this month we discussed the Guidelines with an audience of financial services and private sector development professionals at the World Bank’s Financial and Private Sector Development Forum, who we hope will in turn be better versed about private equity in their exchanges with client governments.

Looking further ahead to early 2013, EMPEA and members of the Council will take part in an international delegation hosted by local organizations in Tunisia and Morocco aimed at improving the dialogue with policymakers and regulators about potential reforms that could enhance the enabling environment for private equity in those markets.

We encourage the membership to share ideas about how the Guidelines initiative might evolve, and we invite any EMPEA member interested in using the Guidelines to engage more actively on regulatory issues in their home markets to contact us. As always, we stand ready to support your efforts.


Mark Kenderdine Davies
General Counsel and Company Secretary, CDC Group plc
Chair, EMPEA Legal and Regulatory Council

In This Issue

Managing Political Risk in Emerging Markets

Africa: Maximizing Opportunities While Minimizing Risks

Marketing Private Funds in the Middle East

Legal and Regulatory Briefs