The SEC has proposed new regulations that would require private funds to disclose to their investors—in standard formats and at standard frequencies—more information than ever required previously. This information includes fund performance figures, fees and expenses, as well as compensation details. Funds would also be required to undergo an annual financial statement audit.
While the SEC has traditionally focused on its role in the protection of retail investors, SEC Chairman Gary Gensler sees the outsized and growing role of private capital in the economy as worthy of more transparency, with the intention of enhancing investor protection—particularly in the context of pension funds and endowments showing more interest in alternative assets like real estate and infrastructure.
We believe these new rules—if and when they pass, and depending on the final set of requirements—will lead to challenges when working within a legacy operating model. Hedge funds and private equity groups will need to reevaluate their time and resources as they prepare to comply with these regulations, and may choose to either begin or increase outsourcing their middle and back-office operations. Outsourcing can help relieve the burden of relying on internal resources for regulatory reporting and fund administration services.
SS&C is in a prime position to assist funds needing to leverage technology and expertise as they navigate evolving SEC regulations. As the industry’s largest fund administrator, SS&C continuously invests in private fund experts and leading technology to prepare you for any new structure, asset class or regulation and give you the speed and agility to capitalize on new opportunities.