NL - Dutch House of Representatives questions private equity

The round table initiative follows accusations that hedge funds and private equity players 'plunder' the Dutch economy and was designed to 'gather information on the influence of hedge funds and private equity in general'.

The round table was attended by the likes of Mr van Berckel of CVC Capital Partners and Mr Borgdorff of AlpInvest Partners, as well as Mr Oppetit of Centaurus and Mr Korteweg of Cerberus Capital Management. Mr Kalff, former chairman of the managing board of ABN AMRO and current board member of industrial conglomerate Stork and Volker Wessels, Mr Wellink, president of the Dutch Central Bank, Mr Koster, director of the Netherlands Authority for the Financial Markets and several MPs of various political parties were also present.

Although it was recognised that private equity positively influences liquidity in the economy, and the distinction between hedge funds and private equity appears to be better understood, concerns were raised over the ease with which these asset classes can currently influence voting behaviour during takeovers of corporations.

Among the regulatory changes suggested were an introduction of the mandatory bid rule at 30%, a lowering of the threshold at which shareholders have to identify themselves from 5% to 1%, a ban of 'contracts for difference' which allow funds to vote by borrowing shares and lifting the threshold for moves to dissolve a board from 51% to two-thirds.

The impact of the round table on the functioning of private equity players in the Dutch economy remains as yet unclear.

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