Regulators May Examine Private Equity Valuation

Chidem Kurdas

The Dodd-Frank Act mandates the registration of hedge fund and private equity advisers with assets over $150 million. Venture capital managers and family offices are exempt from the registration requirement, but not private equity.

Once private equity managers become registered investment advisers, like all RIAs they will be subject to examinations by the Securities and Exchange Commission. The SEC looks at valuation polices and practices, among other issues. Private equity valuation will be scrutinized and has to be documented and supported, says Sal Shah, a partner at accounting firm McGladrey.

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New Fund Despite Tough Conditions

Chidem Kurdas

A very difficult environment for raising money, in particular for fund of funds, has not stopped the launch of investment vehicles. But the new products tend to come from firms with established distribution networks, which gives them a better chance of finding clients. They also tend to have a broader investment agenda than hedge funds-only vehicles.

Fund Targets Both Top and Emerging Managers

Chidem Kurdas

One of the largest independent advisor firms, SCS Capital Management,  is preparing to launch a vehicle that will invest in top-tier hedge funds but will round out the portfolio with  promising early-stage managers.