Chris Witkowsky

Some LPs have been frustrated by what they describe as a loophole in the GPs’ ostensible 80-100% management fee offset.

LP portfolio sales, which came back and then faded out again as the markets turned earlier this year, are expected to be a major part of volume in the second half.

Rising expenses, and the challenge for many LPs of getting the financial data they need to justify the costs, are leading to misalignment between managers and their fund investors.

The SEC is exploring potential rulemaking around GPs’ disclosure of fees, expenses and conflicts, the chairman said last month.

The SEC under president Biden is expected to take a more aggressive role in regulating and punishing bad practices across corporate America, including private equity.

Rozenblit announced this week the launch of his firm, Iron Road Partners, to work with alternatives shops on preparing for regulatory examinations and investigations, among other things.

There is a growing trend of GPs finding ways to hold certain assets longer than allowed under traditional private equity fund structures.

The SEC under President Biden is expected to take a more aggressive role in regulating and punishing bad practices across corporate American, including private equity.

Sharing deficiency letters is one aspect of a bill introduced in 2019 called Investment Adviser Alignment Act that has been backed by major institutional investors.

Critics of private equity have long considered this a loophole that allows already-wealthy private equity GPs to pay less than regular workers.