SEC asset management unit’s enforcement priorities for 2015 – conflicts of interest

2015 ◽  
Vol 16 (2) ◽  
pp. 22-25
Author(s):  
Perrie Michael Weiner ◽  
Patrick Hunnius ◽  
Sean R. Crain
Keyword(s):  
Asset Management ◽  
Hedge Funds ◽  
Financial Services ◽  
Private Equity ◽  
Conflicts Of Interest ◽  
Content Type ◽  
Enforcement Action ◽  
Investment Companies ◽  
Equity Funds ◽  
Private Equity Funds

Purpose – To address “Conflicts, Conflicts Everywhere,” a speech at the recent IA Watch 17th Annual Compliance Conference by Julie M. Riewe, co-chief of the Securities and Exchange Commission’s Enforcement Division’s Asset Management Unit (AMU). Design/methodology/approach – Provide information on the AMU’s creation, the AMU’s 2015 priorities for each of the primary investment vehicles it polices –registered investment companies; private funds (both hedge funds and private equity funds); and other client accounts, such as separately managed accounts/retail accounts – and the AMU’s central concern across all of the investment vehicles it polices: conflicts of interest. Findings – Conflicts of interest will be receiving much attention from the Commission in the coming months. In order to help avoid an SEC inquiry or, worse yet, an enforcement action, corporations and individuals should seek counsel. Originality/value – Practical explanation and guidance from experienced securities and financial services lawyers.

8 Investor Protection Concerns in Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Hedge Funds ◽  
Private Equity ◽  
Business Models ◽  
Conflicts Of Interest ◽  
Investor Protection ◽  
Hedge Fund ◽  
Private Investment ◽  
Investment Funds ◽  
Equity Funds ◽  
Private Equity Funds

This chapter examines the governance challenge in private investment funds arising from investor protection failures. It begins with a discussion of the Madoff affair, which brought to the fore alleged failures in reporting, oversight and governance mechanisms regarding private investment funds, whether hedge funds, private equity funds, real estate opportunities funds or other more esoteric investment pools. It then considers some issues which the Madoff debacle drew attention to, including the presence of multiple fund vehicles in the same structure or in interconnected structures such as parallel funds, master-feeder, and fund of funds. It also analyses the Financial Conduct Authority’s (FCA) concerns about hedge fund fraud and conflicts of interest that may arise in the business models of any of the participants in the private equity market. Finally, it describes ongoing diligence and oversight regarding private investment funds and the Securities and Exchange Commission’s (SEC) concerns over due diligence involving private funds.

SEC targets broker-dealer implications of transaction-based deal fees

2016 ◽  
Vol 17 (4) ◽  
pp. 75-76
Author(s):  
Jason Daniel
Keyword(s):  
Private Equity ◽  
Securities And Exchange Commission ◽  
Equity Fund ◽  
Content Type ◽  
Private Equity Fund ◽  
Enforcement Action ◽  
Policies And Procedures ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Brokerage Commissions

Purpose To explain a US Securities and Exchange Commission (SEC) enforcement action against a registered investment adviser to private equity funds for allegedly providing brokerage services in connection with the acquisition and disposition of the securities of portfolio companies while not being registered as a broker dealer, making undisclosed use of fund assets, and failing to adopt policies and procedures designed to prevent the alleged violations. Design/methodology/approach Describes the services provided by the investment adviser, the compensation paid, and the SEC’s other bases for enforcement, and draws conclusions for private equity fund advisers. Findings The SEC has begun pursuing transaction-based compensation paid to private equity fund advisers relating to portfolio company transactions as illegal brokerage commissions. The Commission also continues to target the adviser’s undisclosed use of client fund capital, especially in private equity funds. Originality/value Practical explanation by experienced investment management lawyer.

Expense allocation: the SEC brings down the hammer

2015 ◽  
Vol 16 (1) ◽  
pp. 66-68
Author(s):  
Kenneth Berman ◽  
Gregory Larkin ◽  
Phil V. Giglio ◽  
Erica Berthou ◽  
Michael P. Harrell ◽  
...  
Keyword(s):  
Design Methodology ◽  
Private Equity ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Enforcement Action ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Investment Advisers ◽  
Private Equity Sponsors ◽  
Practical Implications

Purpose – Describe an important recent enforcement action by the Securities and Exchange Commission (SEC) regarding expense allocations by private equity funds. Design/methodology/approach – Discusses a recent enforcement action by the SEC regarding a registered investment adviser’s handling of expense allocation with respect to two private fund clients and certain of their underlying portfolio companies. Findings – The settlement and sanctions are noteworthy because: (i) there was no suggestion that the misallocations of expenses were designed to systematically favor one private fund client over the other, that the manager benefited from such misallocations, or that the failure to allocate expenses in accordance with the policy had been deliberate and (ii) while not stated explicitly, it appears likely that a significant portion of the disgorgement related to misallocations that occurred before the manager was a registered investment adviser. Practical implications – Registered investment advisers should ensure that they and their portfolio companies have written policies in place designed to fairly allocate all expenses among all entities that benefit from the activities driving such expenses and that none of the sponsor’s clients are directly or indirectly benefited or harmed from allocation policies at the portfolio company level. Originality/value – Description of a noteworthy SEC enforcement action regarding expense allocation and practical guidance from investment management lawyers to remind private equity sponsors to ensure that they have adopted and implemented expense allocation policies.

scholarly journals The Rise of Institutional Investors

2019 ◽  
Author(s):  
Jan Fichtner
Keyword(s):  
Mutual Funds ◽  
Hedge Funds ◽  
Institutional Investors ◽  
Private Equity ◽  
Short Term ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Important Position ◽  
State Street ◽  
Asset Managers

During the last decades, institutional investors gained an ever more important position as managers of assets and owners of corporations. By demanding (short-term) shareholder value, some of them have driven the financialization of corporations and of the financial sector itself. This chapter first characterizes the specific roles that private equity funds, hedge funds, and mutual funds have played in this development. It then moves on to focus on one group of institutional investors that is rapidly becoming a pivotal factor for corporate control in many countries – the “Big Three” large passive asset managers BlackRock, Vanguard and State Street.

Industry-Wise Investment Pattern of Select Private Equity Funds in India

2018 ◽  
Keyword(s):  
Financial Services ◽  
Private Equity ◽  
Equity Fund ◽  
Equity Investment ◽  
Private Equity Fund ◽  
Investment Pattern ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Indispensable Tool

The article is an analysis of Private Equity investment deal values across 24 industries by select Private Equity funds from 2007–2016. The purpose of the research is to identify any patterns of movement of deal values. The study established the growth rate of deal values and observed the performance of each Private Equity fund throughout the 10-year period. The purpose of the study is to determine the significance of Private Equity investment for the promotion, growth, and development of industries. In the case of heavy industries such as Energy, Engineering and Construction and Manufacturing, Private Equity investment becomes inevitable, at least as a supplement to government funding. Due to rising disposable income and purchasing power of people, industries such as BFSI (Banking, Financial Services, and Insurance) Retail, and other services such as Travel, Transport, and Telecom are also attracting considerable Private Equity. The role of Private Equity as an indispensable tool for industrialization is emerging and becoming dynamic. Furthermore, the government’s go-ahead attitude towards reforms is further boosting Private Equity investment’s opportunities and impact on India’s economic development.

1 Introduction to Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Corporate Governance ◽  
Hedge Funds ◽  
Financial Services ◽  
Private Equity ◽  
Private Investment ◽  
Fiduciary Duty ◽  
Regulatory Regime ◽  
Investment Funds ◽  
Equity Funds ◽  
Investment Manager

This chapter provides an introduction to private investment funds. It first considers the governance challenge in private investment funds that can be regarded as a need to improve the standard of corporate governance in the legal vehicles that comprise such funds. In particular, it examines the manner in which hedge funds and private equity funds affect the corporate governance of the portfolio companies in which they invest. The chapter proceeds by discussing governance issues arising from the use of partnerships vs. corporations as private fund vehicles, along with the consequences of governance failures and the function of private investment funds. It also analyses legal and regulatory issues surrounding the structuring and operations of private investment funds, the legal and fiduciary duties of the investment manager, and fiduciary duty in the financial services regulatory regime. Finally, it describes alternatives to centralised, top-down regulation of private investment funds.

Sign in / Sign up

Export Citation Format

Share Document