The growing influence of the infrastructure asset class has been documented in many different ways, but one of the less obvious signposts is the way in which it recently contributed to a name change.
Formed in 1983, the European Private Equity and Venture Capital Association (EVCA) has for more than 30 years sought to win friends and influence people on behalf of private equity investors and venture capitalists in the corridors of power in Brussels.
But, partly in recognition of a growing number of infrastructure funds among its 700-strong membership, the organisation will, from October this year, be known by the catch-all name of Invest Europe – along with the strapline “The voice of private capital”.
Michael Collins, deputy chief executive of the EVCA and its public affairs director, met recently with Infrastructure Investor and explained that many of the organisation’s private equity members had over the years launched infrastructure businesses and wanted to know how they could be appropriately represented.
‘Structure and formality’
About a year ago, this led to the formation of an infrastructure roundtable which now has around 12 members – including the likes of Arcus Infrastructure Partners, Ardian and EQT – and which discusses what the priority issues should be for EVCA in the infrastructure arena. The roundtables, which happen quarterly by way of conference calls, “provide a bit of structure and formality and enough governance to make things happen” according to Collins.
Some of the EVCA’s lobbying will be on regulatory issues familiar to infrastructure investors such as the Alternative Investment Fund Managers Directive (AIFMD), Solvency 2 and Basle 3 as well as taxation issues. Beyond this, the organisation is exploring how it can be most useful in relation to issues specific to relevant sectors including energy, transport, environment/waste and social infrastructure.
Collins acknowledges that “we are at the beginning of that process. We are asking ourselves which are the most important sector-related issues at the European Commission (EC) level and where can we have the most impact. There are other lobbyists operating at the sector level. How far should we be involved?”
Livio Fenati, a partner at London-based fund manager Arcus Infrastructure Partners, is chairman of the roundtables. He recalls being approached by Collins and EVCA chief executive Dorte Hoppner around one and a half years ago and told that the EVCA wanted to undertake more activities dedicated to infrastructure.
“We were pleased, as there can be disconnect between the infrastructure asset class and public bodies,” says Fenati. “We need to work out how to be more effective in managing relationships with regulators and with the public side more generally.”
He elaborates on how greater awareness of risk has pushed infrastructure investors to want to engage more fully with stakeholders. “There used to be a perception that a fully regulated asset was the safest thing in the world,” he reflects.
“But we now know that’s not true. With an unregulated asset, if something goes wrong there are several levers you can pull and you can use active management. But if it’s fully regulated, there’s often no place to hide. Sovereign risk was underestimated before the Crisis. Now there is more appreciation of risks and of the need to have proper relationships with governments.”
The importance the infrastructure asset class is now attaching to its image and the quality of its communication effort is reflected in the recent launch of two industry bodies, including the Global Infrastructure Investor Association (GIIA), whose work Collins says will be “complementary” to the efforts undertaken by EVCA.
“GIIA is global and we are focused on Europe,” says Collins. “We are on the ground and, on a day-to-day basis, we live and breathe what happens at the EU level. We’re operating where the rubber hits the road with respect to specific pieces of legislation.”