Nicole Krea Discusses Private Fund Rules in Barrons

The Securities and Exchange Commission (SEC) recently announced new regulations for private fund advisors that will have a broad impact across the industry.

Asset management partner Nicole Krea told Barrons that, “at a high level, the new rules are geared toward addressing certain areas of private fund activities where the SEC has determined there is a need for further investor protection to prevent fraudulent or misleading conduct.”

In reference to the new limits on preferential treatment, Nicole said “there may be funds now that disclose preferential treatment in a summary fashion. Under the new rules, they can’t simply disclose that some investors may get a fee break, the disclosures have to be granular. What fee break? A potential negative of this is that the knowledge that all investors can see all side letters might chill the inclination to offer certain rights.”