The strength of trade associations such as the EVCA comes from diversity. The EVCA represents the whole private equity industry, including institutional investors such as pension and insurance funds, venture capital firms, which invest in young, high-growth companies, the largest buyout firms and all the funds in between.
It is only by coming together as one voice that we can make sure that all these groups’ individual voices are heard by Europe’s policymakers. As an industry, we are stronger and better represented by working together, united.
Let’s take venture capital as an example.
What we sometimes forget is that in the world of financial markets and regulation, dealing in trillions, private equity is itself a small fish in a large pond. Venture capital is an even smaller fish in the private equity pond, so it is vital to innovation and growth that we punch well above our weight. The EVCA and the national trade associations enable us to do that.
Venture capital has gained tangible benefits from participation in the EVCA. The EVCA engages actively in Brussels with several directorates and frequently brokers dialogue between these directorates to achieve greater focus on policy for venture investment and SMEs. What the EVCA achieved last year for venture capital in a challenging environment is evidence of this.
The European Venture Capital Regulation will soon, if passed as we expect next month, make it much easier for smaller venture firms to raise funds across borders.
As a result of significant communications and research effort, EU policymakers are now convinced of the positives that venture capital investment can bring, seeing it as a generator of jobs and economic growth.
The EVCA also helps to make the case to investors, globally, for European venture capital. Preparing the turf for individual managers to make their own cases.
And while all the different parts of the private equity industry differ in their models, they all have one thing in common. From seed capital to the largest buyouts, all of them need to be drivers of growth today.
Returns as well as reputation depend upon it.