Who's for private equity?
Pension funds have been identified as one of the factors that could help in the development of the European private equity industry.
The European Venture Capital Association says that it has identified 10 indicators – of which five are tax related – which can contribute to “shaping” a favourable environment for private equity. Pension funds were one of the non-taxation factors, alongside fund structures, better merger regulation and an “entrepreneurial environment”.
“The fragmentation of tax and legal environments in the European union hamper the development of a truly entrepreneurial environment and therefore require urgent attention,” EVCA says.
The body has launched a long-term initiative to identify where tax and legal measures can be improved to develop a “truly European” private equity and venture capital environment.
It has presented a new paper, European Private Equity and Venture Capital: Benchmarking European Tax and Legal Environments as a benchmarking tool to enable European countries to be compared.
“The purpose of the report is to promote convergence and not disparity,” says EVCA chairman Max Burger-Calderon. The study found that the UK and Ireland have the most favourable regulatory environment for private equity and venture capital. Next were Luxembourg, the Netherlands, Italy and Greece.
Slightly worse than average were France, Sweden and Belgium. Spain, Finland, Portugal and Germany were towards the bottom of EVCA’s scale. And it found that Denmark and Austria “provide the least favourable tax and legal environment for private equity and venture capital”.