I battled with this for a few hours before I finally found the answer here. One of the users on there pointed me into the right direction, so I started looking. I have never been to this advance area of ESXi so I didn't even clue in to what the user on the forum was saying exactly, so I decided to get a couple of screen shots to make it easier, as inevitably there will be more and more people who move to Hyper-V and want to do V2V over from Vmware.
All you have to do if you get the error below is navigate to your vSphere client, select the host(s) where the VM you are trying to V2V resides, and navigate to the configuration tab, click on "System Resource Allocation", followed by Advanced at the top right.
Find "hostd" in the list of resources, and click on Edit Settings: