Legal & Regulatory Bulletin – Issue No. 9, Summer 2013

At its May meeting in Washington, EMPEA’s Legal and Regulatory Council discussed the regulatory changes facing the private equity industry and the likely impact of those changes on the membership of EMPEA.

The Council concluded that some of the changes, such as the European Alternative Investment Fund Managers Directive (AIFMD), would impact the industry globally whilst others, occurring on the margins, still had potentially far-reaching implications, such as the erosion of cross-border enforcement of arbitral decisions. Council Members believed that the changes would, in aggregate, impact the cost of managing and operating private equity firms in our markets. This issue of the Legal & Regulatory Bulletin addresses both those regulatory developments that we believe have a global reach as well as evolving fundraising and deal making conditions in markets where you, the EMPEA membership, are most active.

We start with an update on an important but perhaps poorly understood aspect of the AIFMD, namely the importance of cooperation between the European supervisory authority and its counterparts in other countries. SJ Berwin, an international law firm, apprises us of the status of current cross-border information sharing and enforcement arrangements, a pre-requisite to the eventual implementation of a passporting regime for marketing by non-EU managers or by EU managers’ marketing non-EU funds within the EU.

Moving south, ECP, a pan-African fund manager, provides guidance on how private equity dealmakers on that continent can contend with the complexity and diversity of local legal regimes and judicial environments. Colombian law firm Brigard y Urrutia then offers a perspective on that country’s prospects, not just as an emerging source of investor capital but also as an increasingly attractive investment destination.

Finally, in our annual Debevoise & Plimpton update on terms and conditions for emerging market private equity funds, we see that the increasingly strong negotiating power that investors wield in a capital constrained world is yielding important changes in fund structures with potential long term ramifications for the conventional fund model.

We look forward to exploring the regulatory changes faced by and shaping our industry when EMPEA next convenes at its annual London events on 15th and 16th October 2013. Until then, we invite your comments and observations on the matters that are puzzling and concerning you. We’ll do our best to address some of those concerns in the next Bulletin. In the meantime, enjoy your summers—we look forward to engaging with you again in the Autumn.


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


In This Issue

ESMA Third Country Cooperation Arrangements under AIFMD

The Legal Challenges of Private Equity Deal Making in Africa

The Changing Landscape of Private Equity Fund Formation

The Outlook for Private Equity in Colombia