Continuing with my look at the changes to Form ADV, I spent some time looking at the new umbrella registration. One investment adviser (“Filing Adviser”) will be able to file a single Form ADV on behalf of itself and other investment advisers (“Relying Advisers”). This tackles the problem fund managers had when the manager was … Read more »
Category: Private Investment Funds
Don’t Charge Your Examination and Investigation Expenses to Your Funds
Most private fund documents allow the manager to charge the funds for expenses incurred in the operation of the funds. Most investors expect and most managers charge the funds for some of the legal expenses and consulting expenses. The Securities and Exchange Commission though Cherokee went too far in charging the funds for expenses related … Read more »
Another Private Equity Fee Case from the SEC
When the Securities and Exchange Commission announced last year that it was not happy with the fees private equity funds were charging and how they were disclosed (or not disclosed) to investors, we expected enforcement cases to follow. They are here. The latest is against Fenway Partners for failing to disclose conflicts of interest to … Read more »
Private Fund Statistics
If you manage a private fund and are registered with the Securities and Exchange Commission, you spend a good chunk of April (and maybe more) filling out Form PF. Ever wonder what the SEC does with all that data? They publish an annual report on fund statistics, which was recently released. Form PF implemented Section … Read more »
Why I think the Accredited Investor Standard Should Not Change
The SEC Investor Advisory Committee is scheduled to vote on a reform plan from a subcommittee at its Oct. 9 meeting. That plan calls for the SEC to rethink the income and net-worth minimums used to define an “accredited investor.” Much of the concern about private placements is about risk. They seem to be universally … Read more »
Group Purchasing Programs and Compliance
Can a fund manager save the investors money, but still be doing the wrong thing? That’s the issue presented by the Securities and Exchange Commission’s look at group purchasing programs for private equity firms. Buying in bulk usually results in cost savings. A private equity firm, with a collection of companies in its portfolios, should … Read more »
Guidance on Accredited Investor Verification
The Securities and Exchange Commission revised the private placement rules last year to permit public private-placements. Of course it took some prodding from Congress in the JOBS Act to get that change. The law and the new regulation require the issuer to take “reasonable steps” to determine that the investor is an “accredited investor.” The … Read more »
Private Equity Real Estate Top 50 – 2014 Edition of Who Is Registered
Private Equity Real Estate has released its ranking of the top 50 real estate private equity fund managers. As I have done in the past, I parsed the list to see which managers are registered with the Securities and Exchange Commission as investment advisers. (Disclosure: my company is on the list.) Rank Name of institution … Read more »
SEC Charges Private Equity Fund Manager with Misallocation of Expenses
In the presence exam initiative, the Securities and Exchange Commission identified conflicts of interest as a high risk area. Included in that high risk area is the allocation of fees and expenses. The SEC just brought charges against a private equity fund manager for the improper allocation of fees and expenses. The SEC charged Scott … Read more »
More Guidance on Knowledgeable Employee Exemption for Private Funds
A new no-action letter from the SEC’s Division of Investment Management should allow more employees of a fund manager to invest in their firm’s private funds under the Investment Company Act. Even better for the compliance department, compliance staff could fit the expanded definition of a “knowledgeable employee.” When operating under the Section 3(c)(7) exemption … Read more »