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Do You Fit the Profile? SEC Releases More Data on Newly Registered Private Equity Funds

Investment adviser complianceThe Securities and Exchange Commission (SEC) recently released additional data regarding newly registered advisers to private equity funds and hedge funds.  The data reveals that the SEC may soon examine some of the largest funds in the world.

Fourteen of the 50 largest hedge fund advisers in the world, and 18 of the 50 largest private equity funds in the world, have registered with the SEC under the Dodd-Frank Act, according to Carlo V. di Florio, Director of the SEC’s Office of Compliance Inspections and Examinations. Bain Capital, Blackstone, Carlyle and TPG are among the newly registered fund managers.

During his remarks at the Private Equity International Private Fund Compliance Forum, di Florio provided further insight into the data profile of new registrants:

  • There are now close to 4,000 IAs that manage one or more private funds registered, of which 34% have registered since the effective date of the Dodd-Frank Act.
  • 32% of all advisers that register report that they advise at least one fund.
  • Of the roughly 4,000 registered private fund advisers, 7% are domiciled in a foreign country (the UK is the most significant).
  • Overall, registered advisers manage nearly 31,000 private funds with total assets of $8 trillion (16% of total assets managed by all registered advisers).
  • Of the 50 largest hedge fund advisers in the world, 48 are now registered with the SEC. Fourteen of these are new registrants.
  • Of the 50 largest private equity funds in the world, 37 are now registered with the SEC. 18 of these are new registrants.

Now, it is not difficult to imagine where the SEC’s focus will be so be prepared.  “A significant percentage of new registrants” will face “coordinated examinations … focusing on the highest risk areas of their business” as part of a risk-rating process, di Florio said. Now this is old news.

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