In MarketWatch, The Wall Street Journal and Other Key Media, Jason Brown Examines New SEC Proposed Regulations for Private Funds

In The News
February 18, 2022

In MarketWatch, The Wall Street Journal, Pitchbook, PE Hub, Buyouts Insider, and FundFire, asset management partner Jason Brown discussed the U.S. Securities and Exchange Commission’s new regulation proposal for private funds. Among issues Jason identified, he discussed a provision that would prohibit advisors from seeking indemnification for breaching fiduciary duty. MarketWatch writes:

“Brown said the rules in question are also known as hedge clause provisions between private equity firms and their investors. These agreements typically say the private equity firm will be indemnified by the fund for losses it suffers so long it meets the standard of care – with no negligence or gross negligence. Now, under the proposed rule, that practice is prohibited. That means that a provision that was typically negotiated between investors and private equity fund managers would no longer be allowed.”

Jason notes that some proposals announced by the SEC were anticipated by private funds, such as those pertaining to data and performance transparency.

Read Ropes & Gray’s client alert on the new rules here.