In 2008, the European Private Equity & Venture Capital Association – EVCA to its friends – had its 25th birthday. At the time, the organisation didn’t have much to celebrate.
Its members were increasingly under fire from politicians and mainstream press, suffering in a public relations battle for which they seemed unprepared and ill-equipped. Some blamed their associations (national and regional) for that; some blamed the larger firms for giving the industry a bad name. Either way, there was a feeling in certain quarters that umbrella bodies representing firms of every size and strategy were no longer fit for purpose; that smaller, more focused groups were a better response to the new order.
In addition, EVCA members were staring down the barrel of the worst economic crisis in a generation. And the toll of this crisis would not only be financial; in the weeks and months that followed the collapse of Lehman Brothers, it became clear that the entire financial sector – including private equity – was about to come under sustained attack from the regulators.
Was EVCA the right organisation to fight this battle on the industry’s behalf? At the time, many in private equity thought not. The organisation had started out primarily as an investors’ club, helping GPs get together for cross-border deals and cooperation. And while its offering had evolved substantially since, just as its members had evolved substantially, it didn’t really have the resources or the expertise to deal with the sort of public affairs challenges that were clearly coming – for the simple reason that it had never really needed them.
Five years on, as EVCA celebrates its 30th birthday, perhaps the best testament to its subsequent response is that it’s now hard to imagine a time when people in the industry questioned its reason to exist. The financial crisis proved to be a turning point for a lot of organisations; but in most cases, not in a good way. EVCA may be one of the exceptions.