Mashid Mojabi: Persistence pays off!
This column was originally written in Dutch. This is an English translation.
By Mashid Mojabi, Policy Lead, Dutch Association of Private Equity and Venture Capital Funds (NVP)
The European single market promises free movement of capital, but for private equity and venture capital fund managers, offering and managing funds across borders remains complex and costly in practice.
Anyone wishing to offer an AIFMD fund to investors in other EU Member States, such as France, Germany or Italy, will quickly find themselves facing a hefty bill. Approaching investors in other Member States is often classified as (pre-)marketing, which means that the fund must be registered with the local supervisory authority in advance. This involves registration costs, annual supervisory fees, notification fees, and even rules on local payment agents that vary from country to country, which can significantly increase the total costs in practice.
This is problematic. After all, the European Union is built on the free movement of goods, persons, services and capital. Nevertheless, national rules and costs force fund managers to make strategic choices about where they do and do not offer their funds. In practice, this means that funds only register in a limited number of Member States, denying access to investors in other countries. This is not only frustrating for funds and investors, but also contributes to the further fragmentation of the European capital market and hinders the economies of scale needed to make the European economy competitive with other markets, such as the United States.
Private equity and venture capital funds are almost always structured as closed-end funds. For this reason, a fund manager decides to deregister the fund in certain Member States after closing. After all, it is no longer possible to join and the marketing phase of the fund has ended. However, anyone who subsequently sets up a new fund with a similar strategy within the foreseeable future and wants to offer it again in a Member State where it has previously been deregistered will encounter another hurdle. European rules prohibit the pre-marketing of a fund with the same strategy in that Member State for a period of 36 months. This period seems arbitrary and has long raised questions in the sector about the purpose of this restriction. It is likely that rules that make sense for open-ended funds have simply been copied to closed-ended funds.
After years of criticism, these signals have also reached Brussels. In the autumn of 2025, the European Commission presented a legislative proposal that aims to remove a number of these obstacles, including the 36-month rule. Although the proposal still has to go through the entire European legislative process, this seems to be a step in the right direction. It also shows that consistently raising issues with policymakers by industry associations such as the NVP can actually lead to changes. It is precisely these small steps that together make a difference. In short, persistence pays off!