IPE - Investors must make their opinions known and engage publicly with national and supranational regulators and governing bodies when opposing regulation that could impact the real estate market, according to CMS Cameron McKenna's Melville Rodrigues.

The lawyer, addressing delegates at the IP Real Estate Investor Forum in London, said that while many industry organisations were effective in their lobbying and engagement efforts, governments often found it hard to separate the voices of managers from investors.

He said regulators and states wanted to hear from investors, and that it was imperative they did not rely on conversations behind closed doors, but "stand up and be counted".

"All government wants is transparency," said Rodrigues, a member of INREV's public affairs committee. "They want submissions where people can stand up and be counted, be brave enough to raise their voice - which may differ from that of managers."

He added that regulators and governments welcomed input on how to regulate funds and how regulation should apply to sectors in relation to incoming European Union regulation, such as Solvency II, the Alternative Investment Fund Managers Directive (AIFMD) and the Markets in Financial Instruments Directive (MiFID).

"Too often in dialog with government, in the EU and elsewhere, the state wants to hear what the voice of the investor is," he said. "They find too much that these pan-European or domestic industry organisations represent both - the manager and the investor."

Rodrigues said that, in such organisations, the voice of managers was "typically" stronger.

"I've heard the regulators ask 'when will the investors put their head above the parapet and raise their voice?'" he told delegates in a lecture covering the challenges of new regulation for the real estate fund management industry.

He said the "perennial response" from regulators was that they lacked an understanding of how property investment worked, with the lawyer arguing that the supervisors wanted to understand the nature of both risk and return, and that they needed to be "guided".

He warned that the risk of some regulation was that institutional vehicles would be equated with retail funds and subject to significant consumer protection guidelines, which would create an "overwhelming [amount] of regulation and requirements".

Discussing the impact of AIFMD on joint ventures and investor clubs, he said a concession was eventually won during the directive's trialogue - whereby representatives of the three branches of the EU come together in informal discussions over the wording of legislation - with joint ventures now exempt.

However, he acknowledged that, due to the absence of a definition of 'joint ventures', AIFMD could cause a "headache", with Rodrigues advising managers to be as active or as passive in their approach as it suited them.

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