Doug Cornelius on compliance for private equity real estate
Back in 2012, the Securities and Exchange Commission filed suit against Yorkville Advisors for valuation failures. According to the SEC complaint, the failure was two-pronged: one of misstatements and a second failure to follow the funds’ own policies and procedures on valuation. Yorkville denied the charges. Legal action has continued and Yorkville has been largely … Read more »
These are some of the compliance-related stories that recently caught my attention. It’s On! Federal Judge to Hear First Ever Oral Argument Asserting ICOs are NOT Securities. Read Legal Briefs From SEC, DOJ and Defense Here . . by John Reed Stark This week the ICO/SEC battle is finally on: The first ever oral argument … Read more »
I attended PEI Media’s Private Fund Compliance Forum 2018. As I typically do at conferences, I typed up my notes. Many sessions asked to be off the record and I’m complying and not publishing them. Everything is “Chatham House Rule” so I don’t attribute any of my notes to any particular speaker. Keynote Interview with … Read more »
Funds use a lines of credit to fund capital. The most common is a bridge between funding an investment and calling capital from investors. Based on a poll the audience indicated a wide range of uses and durations for their credit lines. Some indicated that they use the credit line to fund capital to portfolio … Read more »
Investors have increased their focus on Environmental, Social and Governance issues. This panel focused on the compliance role in ESG. According to a poll at the conference, about half of the attendees have a written ESG policy and consider ESG as part of their strategy. There is the balance between wanting to invest for good … Read more »
GDPR is big boogeyman right now. The General Data Protection Regulation has a compliance deadline rapidly approaching in the EU. It protects the personal data of EU residents. It has extra-territorial implications. Firms need consent for use of the data or a specific business relationship. Data breach notifications have to be made within 72 hours. … Read more »
To the extent you are managing risk at your firm, are you managing the risks at your underlying investments. The SEC has been asking about this topic in exams. The most obvious area is cybersecurity. Many of those requirements are not dependent on the company, so cybersecurity compliance carries over. Compliance can create value to … Read more »
Volume of secondary sales is dramatically higher this year, compared to last year. $58 billion. One of the key aspects that secondary purchasers like is avoidance of the blind pool. Usually, the fund is far along in allocating capital. To some extent, it avoids the J-curve problem. Secondaries are able to return capital back to … Read more »
What is the compliance officers’s role in fees and expenses policies and procedures? Compliance may not make the decision, but will be responsible for documenting the agreed-upon allocation. Compliance will be responsible for monitoring. Some allocations can be based on the compliance manual or desktop accounting processes. The SEC wants to make sure you document … Read more »
A panelists of fund compliance officers was moderator by a lawyer. The regulatory landscape is changing rapidly, so the compliance function needs to be able to change rapidly. Compliance should have a seat at the table and be embedded in key functions with conflicts and regulatory concerns. Bolted on compliance will be less effective. It’s … Read more »