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PE industry associations: The advocates

Monday, December 9, 2019

(AVCJ by Tim Burroughs) - Private equity’s increasing politicization globally and its expanding role in economies across Asia has put pressure on industry networkin associations to do more in terms of public engagement.

Little wonder Coller Capital picked up on the issue in the latest installment of its private equity barometer. Asked if political and media criticism of the asset class has grown stronger, 69% of North American LP respondents answered in the affirmative, compared to 57% of Asia Pacific-based investors and 36% of their European counterparts. There appear to be less dissension as to whether private equity industry associations should do more to defend the industry: three-quarters of respondents across all markets think they should.

Yet the growing prominence of private equity necessitates a unified response, whether that involves lobbying on specific issues or simply explaining what the industry does. From Japan to Taiwan to India to Singapore, there are examples of industry associations proactively addressing local issues such as performance tracking, tax and standardized documentation. However, the standout example is perhaps Hong Kong.

It wasn’t until about eight years ago that the Hong Kong Venture Capital & Private Equity Association (HKVCA) first sought to influence policy when it helped the helped the government shape its response to the EU’s Alternative Investment Fund Managers
Directive. The association’s technical committee is now its largest, with separate working groups dedicated to issues such as carried interest and the local regulation of the industry – both hot button topics.


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