The European private equity market could be opened up to retail investors after a few regulatory tweaks, according to Société Générale’s Luxembourg head of regulation and public affairs.
Speaking on the side lines of the ALFI PERE conference on Tuesday Jean-Pierre Gomez suggested the Alternative Investment Fund Directive already supports the asset class’s possible exposure to the retail market.
“In Europe, there’s an opportunity to open up private equity to retail, because we have the AIFMD in place already,” said Gomez.
Further harmonisation of investor reporting requirements across the markets by the European Commission would help open up Alternative Investment Funds to retail investors, he said.
“The prospect of more retail investors will require alternative managers to make AIFs even clearer. Retail investors want transparency, but also to investigate the product themselves,” he added.
This would be increase competition in the retail market as it would require even higher product marketing standards.
The EU’s Capital Markets Union, which aims to create a single, deep and developed capital market to complement bank finance, could play a role in the changes, Gomez said.
“The EU’s CMU is targeting increased growth, which is in line with a market of retail investors seeking opportunities in a regulated market like private equity, where the returns are better.”