Venture capital has reached SMEs
14/07/2014
Diego Gutiérrez
Venture capital has reached SMEs
The government wants to improve access to direct financing for SMEs. To this end, this Friday it approved the draft law regulating venture capital entities and closed-end collective investment entities, which includes the creation of the figure of Capital-Riego pyme and a series of reforms in venture capital entities that establishes the harmonised framework of conditions for authorisation, marketing, conduct and organisation of the managers of these investment funds at European level.

SME Venture Capital

The project envisages that these identities will invest at least 70% of its assets in SMEs and will be involved in managing and advising them. In return, they will benefit from a more flexible financial regime, such as greater use of equity loans, more flexibility in the calculation of compliance deadlines for the mandatory investment ratio and the possibility for venture capital funds to distribute results on a regular basis.

"This legislative initiative joins the initiative of Fond-ICO by which the Government has opened several calls for co-investment with private venture capital mainly oriented to SME growth projects and investments of the type venture capital is for high-growth companies," says Diego Gutierrez from Abra Invest.

New adjustments to risk capital identities

The new regulation envisages the reduction of administrative burdens by maintaining the authorisation regime exclusively for their managers. Venture capital and private equity investment The closed-end collective investment schemes will be subject to a simpler regime of simple registration with the CNMV (Comisión Nacional del Mercado de Valores).

Structure and organisational requirements are also envisaged to ensure control of risks, liquidity and conflicts of interest.

In addition, the remuneration policy, which shall be approved by the management body and periodically evaluated, must be compatible with the company's business strategy.

The marketing of VCs is limited to eligible investors, investors 100,000 and declare in writing that they are aware of the risks associated with the intended commitment.

In addition, the regime for cross-border marketing and management of mutual funds is also included. investment alternative investment funds managed by European and foreign management companies, thus promoting an internal market for alternative investment funds.

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