Private Investment Funds Partner Quoted in ACA Insight on SEC Examinations of Private Equity Funds

Advisers to private equity funds preparing for an SEC examiners’ visit should focus on fees and expenses charged to funds and portfolio companies, notes an Aug. 22 ACA Insight article. Ropes & Gray private investment funds partner Jason Brown (Boston) emphasizes that although examiners review a number of areas, advisers should “[e]xpect examiners to request financial statements of advisers, funds and portfolio companies as they seek to track cash flows that will tell them ‘where the money goes.’”  He adds that “[w]hat examiners want to find out … is that fees charged are consistent with all disclosure and governing documents, including private placement memoranda, limited partnership agreements, operating agreements, and Form ADV. . . . They almost look at that to the exclusion of everything else.”  Advisers preparing for an exam “need to make sure their fee and expense house is in order,” Mr. Brown cautioned.