PE needs help before SEC enforcement blitz

Author: Danielle Myles | Published: 3 May 2013


  • US private equity funds have faced mounting scrutiny and compliance requirements in the past year, and the SEC has explicitly warned enforcement actions will continue to rise;
  • Newly registered funds need help to comply, including guidance on valuation, which is a focus for the SEC;
  • Over 40% of SEC-registered funds were, until last year, exempt from SEC requirements;
  • Until the fund adviser regime changes to reflect the business model of its new registrants, many funds are incurring unnecessary compliance-related costs.

The US private equity (PE) industry has entered a new phase of tougher enforcement, marking a switch in US private fund enforcement which to-date has focused primarily on hedge funds.

The chief of the Securities & Exchange Commission’s (SEC) asset management enforcement unit has explicitly warned that the number of PE cases will increase. But the industry needs further assistance, and rule changes, from the Commission to comply...