Insights

September 14, 2017

Best Practices for Private Equity Managers Entering into Joint Ventures with Investors (Part Three of Three)

There’s been a notable uptick in private equity managers and certain large institutional investors partnering to form joint venture vehicles in which they co-own and co-operate invested assets. In many ways, the nontraditional funding approach can be advantageous for both parties—institutional investors gain the benefit of PE firms’ functional expertise and can take a more active role in managing the investment, and managers can build stronger relationships with these partner-investors and Read More »

August 31, 2017

Best Practices for Private Equity Managers Entering into Joint Ventures with Investors (Part Two of Three)

Large institutional investors with designated in-house teams tasked with evaluating investment opportunities and overseeing allocations have begun partnering with private equity managers to form joint ventures, vehicles into which they can channel their deep resources and experience to take on an even more active role in deploying significant assets. Joint ventures can be beneficial for both large institutional investors and private equity managers because the permanent agreement to purchase, ma Read More »

Preserving a Private Equity Manager’s Business and Legacy: The Keys to a Robust Succession Plan

Developing a thriving private equity business, as distinguished from a traditional corporation, involves fostering a network of interpersonal connections because investors often allocate to one manager over another at least in part based on the strength of a relationship. In fact, in some cases, a manager’s reputation attracts investors as much as the potential returns its portfolio investments can produce. Despite this relationship-centered model, investors are increasingly requiring managers Read More »

August 4, 2017

A Roadmap and Recommendations for Private Equity Managers Facing an SEC Examination (Part Two of Two)

Examination by the Securities and Exchange Commission is a fact of life for registered investment advisers, including private equity funds. In recent years, however, what was already a nerve-wracking process has become grueling, according to some experts, because the SEC has ramped up its examination efforts—in quantity and scope—shortened its deadlines and become more aggressive, all while the specter of enforcement action looms over firms. Preparation is key for managers today, who should Read More »

Best Practices for Private Equity Managers Entering into Joint Ventures with Investors (Part One of Three)

As large institutional investors have become more practiced, they’ve designated specialized investment teams to evaluate investment opportunities and oversee allocation of assets. As a result of their seasoning, they’re better-situated to assume a more active role in deploying significant assets, even beyond their own. More active proprietary investing does not, however, signify that large institutional investors have the expertise required to manage portfolio companies or have access to cer Read More »

July 21, 2017

Practical Ways Private Equity Managers Can Implement and Take Advantage of Blockchain Technology (Part Two of Two)

Blockchain technology initially developed nearly a decade ago to underpin and support the cryptocurrency bitcoin, but increasingly, the finance industry is exploring blockchain’s potential uses in their own right—in particular, the technology’s ability to provide secure, internet-based updates and deliver cost and efficiency savings to back-office functions. Private equity managers, however, have demonstrated more tentativeness than their industry counterparts in warming to blockchain tech Read More »

A Roadmap and Recommendations for Private Equity Managers Facing an SEC Examination (Part One of Two)

Examination by the Securities and Exchange Commission is a fact of life for registered investment advisers, including private equity funds, but in recent years, the SEC’s Office of Compliance Inspections and Examinations has ramped up its examination efforts, in quantity and scope. Accordingly, managers today must be as prepared as possible, and at all times, for the inevitable inspection. At a minimum, to ensure the examination process runs as smoothly as it can and firms avoid potential enfo Read More »

Assessing the Tax Landscape for Private Fund Managers: An Interview with EisnerAmper’s Simcha B. David

Private fund managers have long been accustomed to the myriad regulatory and compliance requirements they must adhere to as a consequence of their business operations. Managers may be, however, less inured to the new tax rules that are continually proposed, debated and implemented and that they must also remain abreast of, and in compliance with—from FATCA to partnership audit and management fee waiver rules to new U.S. Internal Revenue Code Section 385 regulations and Section 871(m) updates. Read More »

June 23, 2017

Custody Rule Compliance: Key Issues and Best Practices for Private Equity Managers (Part Two of Two)

Compliance with Advisers Act Rule 206(4)-2, known as the Custody Rule, has been a challenge for private fund managers. Earlier this year, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a Risk Alert ranking failure to adhere to the Custody Rule’s requirements, designed to enhance the safety of client assets, as among the top five deficiencies OCIE found during examinations of registered investment advisers. (For more on OCIE’s risk alert, s Read More »

Ransomware Attacks: Vulnerabilities, Risks and Strategies for Private Fund Managers to Fight Back (Part Two of Two)

The Federal Bureau of Investigation’s 2015 Internet Crime Report, its most recent, cited nearly 2,500 ransomware incidents against individuals and organizations that year. More generally, some 3,300 malware attacks were reported to the FBI, along with nearly 8,000 business email compromise incidents. The actual and potential exposure is only multiplying. According to the FBI’s May 2017 BEC Public Service Announcement, between January 2015 and December 2016, identified exposed losses increase Read More »