Throughout the pandemic, INREV’s Public Affairs Committee continued to work to promote the interests of the non-listed real estate industry with regulators in London and Brussels and to share their insights with members.
During the past year, the committee has focused on two areas of regulatory reform in particular: AIFMD and the UK Funds Review. Jan Gruter, a partner at Addleshaw Goddard and member of the committee, explains why these are important.
Changes ahead for AIFMD
AIFMD was a game changer when it was introduced
‘AIFMD was a game changer when it was introduced, but is being reviewed by the European Commission ,’ he explains. ‘They intend to make changes that may cause some trepidation among the INREV members, as most have adjusted to AIFMD and put the required processes in place.’ He notes that, as a result, most would prefer as little change as possible.
‘After the proposals emerge late this year, we will engage with policy makers as the EU legislative machinery moves forward. Changes to the Directive mean changes within each national jurisdiction.’ Jan explains that changes such as to delegation arrangements from an EU manager to entities outside the EU could impact how fund management arrangements are structured. ‘This is causing quite a bit of concern,’ he notes.
The UK Funds Review
Turning to the UK Funds Review, Jan notes that this ‘isn’t just of interest to those in the UK but also the wider INREV membership .’ He points out that many real estate fund managers have operations in the UK. Post-Brexit, the UK hopes to be a more attractive fund domicile and not just an operational base. Jan explains that, currently, Ireland and Luxembourg are often more attractive for their structures and tax treatment.
‘UK Treasury is looking to make new structures available to attract more UK institutional investment into funds managed there ,’ he comments. ‘A likely addition is the long-term asset fund, the LTAF, modelled in part on fund structures already available elsewhere, that will make it easier to invest in the UK.’ He adds that INREV submitted responses to the consultation proposals and specific legislative proposals are due to trickle out over the next few months.
Turning to the UK Funds Review, Jan notes that this ‘isn’t just of interest to those in the UK but also the wider INREV membership .’
The EU’s and UK’s evolving ESG regulations are a standing item during monthly committee meetings. While INREV has a dedicated ESG Committee, the views canvassed in the Public Affairs Committee add further perspective and enhance INREV's understanding.
COVID-19 and the Committee
‘We have calls every month where we discuss the consultations that are open for comment, their implications and the submissions that INREV has made. Members share how they or their clients see the new regulation before developing INREV responses.’ Sub-groups are sometimes formed, adding that, ‘we also liaise with other industry bodies to co-ordinate responses - It’s useful to know what other associations are thinking and where we have aligned interests .’
Jan believes the need to work remotely through the pandemic enhanced the work of the committee. ‘It made it easier for people to dial in and contribute,’ he says. ‘In the future, we will probably continue to run some work streams remotely, while the regular meetings may be a hybrid of in-person and online. And after a year of virtual working, it will be good to make personal connections again.'
Jan Gruter is a Partner at Addleshaw Goddard and member of the INREV Public Affairs Committee