March 7, 2019

Private Equity: Big Investors Want More SEC Oversight

According to this “Institutional Investor” article, the largest group of PE fund investors wants more oversight from the SEC when it comes to fund sponsors:

Sure, they have billions of dollars invested and spend millions in consulting and advisory fees. But now, some of the world’s largest private equity investors, along with an industry group, are demanding oversight over the industry they’re largely funding.

On Tuesday, the Institutional Limited Partners Association and 35 of its member institutions sent a letter to the Securities and Exchange Commission pushing for stronger regulations on private equity advisory firms. The letter is in response to a call for feedback from the regulator on how it administers the Investment Advisers Act of 1940.

“This is a culmination of our efforts on this issue,” Chris Hayes, senior policy counsel at ILPA, said by phone Tuesday.

ILPA and the institutions that signed its letter are asking the SEC to enforce tougher standards for private equity fund advisers by requiring clearer standards for disclosures of conflicts of interest, according to the letter.

The letter was signed by some pretty heavy hitting PE investors – including CalPERS, CalSTRS, & the New York City and State retirement systems, among others.

John Jenkins