b'ILPA PRIVATE MARKETS EDGE Q1 202116 17In the European Union, the aftermath of Brexit has resultedreform it. The primary focus of our priority list is two-fold:TheBiden-HarrisAdministrationtookofficewiththe in a potential overhaul of regulations governing private(1) seeking to ensure continued access for EU-based LPsDemocrats in full control of the executive and legislative fund advisers, with the possibility of material impact onto global opportunities; and (2) seeking to require fee andbranches, providing the opportunity to make significant LPs who invest in EU-based managers, and on EU-basedexpense reporting from GPs to their LPs. legislativeandregulatorychanges.Overthecourseof LPs seeking access to global opportunities. The AlternativeILPA submitted comments on the AIFMD consultation onthis four-year term, we expect to see movement on the InvestmentFundManagersDirective,whichregulatesJanuary 28, 2021, preceded by a call with the Europeanfollowingfouritemsthatcouldimpacttheprivatefund all GPs seeking to market their funds in the EU, is beingCommissionstaffdraftingtherule.Ourworkinggroupmarkets. ILPA will be involved in seeking to shape these reformed, and ILPA has been involved extensively in thewill continue to engage with member countries in the EU,issues for the benefit of our members.process since August 2020. part of the EU Council of Ministers, to shape views on the1.SEC Registration Reforms: With Democratic control ILPAformedaworkinggroupofmembersacrosstheproposed legislation while we await the formal legislativeof the Senate, we expect to see swift confirmation of EU to help us prioritize the issues most important to LPsproposal from the European Commission later in 2021.a new SEC Chairman and with it a pro-investor focus in AIFMD reform, chaired by Anders Strmblad of AP2.Our goal is to ensure a positive outcome for LPs in the finalat the SEC. There is a strong possibility that reforms Strmblad shared the LP perspective on behalf of ILPAlegislation. promotinghigherstandardsofgovernanceand to policymakers at a virtual conference organized by theFor those LPs who are not familiar with the LP protectionstransparency will be considered and implemented. European Commission on November 25, 2020. in AIFMD, ILPA has prepared an overview of AIFMD and2.Tax and Infrastructure: In the first half of 2021, we TheILPAAIFMDWorkingGrouphaspreparedILPAshow it impacts LPs. expect a significant package of changes to the U.S. priority list for the European Commission as it works totax code, potentially including increases in the U.S. corporate tax rate, as well as the capital gains ratewhich could result in threats to carried interest tax rates for GPs, as well as an impact on returns. The increasedtaxrevenueisexpectedtobeusedto fund infrastructure investments, with potential knock-on effects for LPs with direct or indirect exposure to related assets.3.Climate and ESG: The new Administration is highly focused on addressing climate change, and we expect new policies to be proposed requiring climate impact reporting by GPs. It is also possible that GPs and LPs governed by ERISA may be required to consider ESG factors in their investment process. Listen to our podcast episode on the 4.Diversity:ThenewAdministrationhasplacedimpact of the elections (note this was apriorityonaddressingracialinequitiesintherecorded prior to the Jan. 5 U.S. Senate economic arena, and we expect new policies to berunoff election)proposedthatwouldrequirediversityreportingCLICK HERE TO LISTENfor GP organizations and at the board level of their portfolio companies.'