Legal & Regulatory Bulletin – Issue No. 8, Spring 2013

The geographical breadth of coverage in this latest issue of the Legal and Regulatory Bulletin illustrates the ripple effects – sometimes substantial – which regulation can have on our asset class regardless of its origins. In particular, this issue examines the consideration set for investors new to emerging market private equity and provides guidance as to how changing regulations can open up new sources of capital for fund managers.

We start the issue with a Guide for New Investors in Emerging Markets, provided by Mara Topping of White & Case. The Guide highlights key considerations for investors committing capital to emerging market private equity funds for the first time. While there is no fundamental legal distinction between private equity funds established to invest in emerging as opposed to developed markets, such vehicles are often evaluated rather differently in practice by investors.

Ying White of Clifford Chance then examines an exciting opportunity for fund managers to access Chinese insurance capital thanks to recent China Insurance Regulatory Commission (CIRC) regulations that lower the entry barriers and expand the eligible investment options for the country’s increasingly wealthy insurance companies. This ground-breaking shift in regulation could create a win-win situation for Chinese insurance companies seeking diversified returns and global fund managers seeking capital, as well as a blueprint for other nascent private equity markets where domestic institutions’ investment portfolios remain largely undiversified.

In our coverage of global regulatory developments, the teams at SJ Berwin and AZB & Partners provide examples of how regulation from the US, Europe and India is having broader ripple effects on our industry. Designed to tackle tax avoidance by US taxpayers, the FATCA regulation is having sweeping effects on the international investment community and presents challenges for fund managers managing comingled pools of capital from diverse sources. The European AIFM Directive is as far reaching, and SJ Berwin provides practical steps for implementation and a rationale for continuing use of Luxembourg as a gateway to accessing capital and opportunities in Europe. AZB updates us on the ramifications of India’s SEBI (Investment Advisers) Regulations, which mark an important milestone in bringing the Indian securities markets up to global standards.

To respond to and shape these currents in the regulatory landscape, EMPEA is working to introduce the EMPEA Legal & Regulatory Guidelines as a framework for continued discussions with regulators. Last month, the Guidelines served as a starting point for discussions led by the Moroccan private equity and venture capital association, AMIC, with Moroccan government officials, regulators and local industry stakeholders in relation to potential reforms that could enhance the environment for private equity and help to create a central hub of financial activity for the North and West African region. We continue to explore opportunities to grow the asset class drawing on the Guidelines, which have now been translated into French with other versions soon to come. The French version of the Guidelines will be available on our website at

We invite EMPEA Members to alert us to opportunities to partner with local organizations to discuss and overcome regulatory challenges and look forward to continuing the dialogue face-to-face in Washington this May at the Global Private Equity Conference.


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

In This Issue

Risk Mitigation in Fund Documents: A Guide for New Investors in Emerging Markets

Accessing Chinese Insurance Capital

Investment Adviser Regulations: A New Regime in India

FATCA Fun for Funds

Alternative Investment Fund Managers – Luxembourg’s Attractive Features on Substance and Delegation

EMPEA Legal & Regulatory Timeline

EMPEA Guidelines Update