Weekly round-up: AIFMD requirements could stall fundraising success

Though the fair valuation requirements of the AIFMD may seem superfluous for private equity, it could give GPs an edge when it comes to fundraising. Nevertheless, as tempting as it may be to underestimate and over-deliver, dangers threaten those GPs that conservatively assess NAV. According to Mathias Schumacher, managing director of Duff & Phelps' valuation advisory service, the first is the impact on LP allocations. "LPs will ultimately be over-allocated to private equity if GPs are using conservative valuations. If GPs are valuing conservatively it could look like the LP has a 5% allocation but in reality could be more like 6-7%." What's more, if GPs are to provide valuation on an internal basis, the FCA may require the procedures and valuations to be verified indendently. Though requirements may seem cumbersome, with many LPs expecting an independent valuation as part of the due diligence process, GPs looking to hit the fundraising trail would do well to submit to the weight of heavy-handed rules.

The current quarter has recorded a welcome uptick in large-cap transactions across new deals and exits. Boosted by healthy public markets and a strong supply of financing, preliminary figures from unquote" data suggest a marked recovery on the investment side after a lacklustre first quarter. Germany took the lion's share of large-cap investments and was home to no less than half of the 10 buyouts valued at more than €500m recorded so far this quarter. But in a surprising twist, it is not the UK but France that follows hot on Germany's heels, with four deals above €500m. Large-cap activity is gaining momentum in Europe this year, but which country will come out on top?

That's all from me this week but don't forget that entries are now open for the unquote" Awards, to be held in London on 2 October. To submit your entry, please visit the dedicated website. Good luck!

If you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Amy King
News Editor, unquote"

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