Doug Cornelius on compliance for private equity real estate
The Yucaipa Master Manager didn’t properly inform investors of all costs tied to preparing tax returns. Yucaipa resolved the case without admitting or denying the SEC’s allegations. Under the fund documents for the Yucaipa American Alliance private equity funds, the cost of preparing the funds’ tax tax returns are an expense of the funds. Yucaipa … Read more »
The Institutional Limited Partners Association and 35 of its member institutions sent a letter to the Securities and Exchange Commission pushing for stronger regulations on private equity advisory firms. ILPA is asking the SEC to make 7 changes. Rescind the Heitman Capital Management No-Action Letter, issued in 2007. SEC enforcement settlements with private fund advisers … Read more »
It’s not often that I open The Boston Globe and see a front page story about compliance with Security and Exchange Commission’s Rule 206(4)-5: Patrick stays quiet as his former aide runs for governor. Jay Gonzalez was the former Secretary of Administration and Finance for the state of Massachusetts under Governor Deval Patrick. Mr. Gonzalez … Read more »
Yesterday I pointed out the fiduciary duty obligations laid out in the SEC’s new release. The other half of the release is a request for comment on three new proposals to enhance investment adviser regulation. Federal Licensing and Continuing Education Provision of Account Statements Financial Responsibility The SEC notes these as areas where the broker-dealer … Read more »
Of the trio of regulatory releases from the Securities and Exchange Commission last week, the one targeted at registered investment advisers is a little weird. It sets out the fiduciary duty of investment advisers, sort of, and proposes some new regulations. One of the problems with the fiduciary duty is that it is not explicitly … Read more »
It’s that time of the year again. Real estate fund managers registered with the Securities and Exchange Commission are working on their Form ADV filings. I’m hearing a few questions about the right way to calculate Regulatory Assets Under Management. The instructions to Form ADV Part 1 Appendix B provide three steps on page 9: … Read more »
While looking through the various restrictions on advertising for investment advisers, I was struck by how they fail to address the operations of private equity funds. The Securities and Exchange Commission effectively banned advertising by investment advisers for decades. As reality came, the SEC relented, subject to strict restrictions. In this post-Dodd-Frank world with private … Read more »
I run across compliance stories that make me scratch my head when I find something odd. I just came across another that made me remember one of the quirks of registration with the Securities and Exchange Commission as an investment adviser. The SEC was after Timothy Sexton and his advisory firm, Bantry Bay Capital. Examiners showed … Read more »
The U.S. Securities and Exchange Commission proposed to increase the net worth threshold for “Qualified Clients” from $2 million to $2.1 million. Rule 205-3 currently requires “qualified clients” to have at least $1 million of assets under management with the adviser or a net worth of at least $2 million. Under the Investment Advisers Act, an … Read more »
2016 is a leap year. That means there was an extra day in February. That moves the deadline for investment advisors and registered fund managers for filing Form ADV from March 31 to March 30. In other words, Form ADV is due today. Hopefully that has not caught you off guard. If it has, you … Read more »