An interesting upshot of pandemic for SEC enforcement

OCIE exams and SEC enforcement: Many have been wondering how all this will affect Office of Compliance Inspections and Examinations exams. Some of the fallout is obvious: they’ve added questions regarding firms’ responses to covid-19, and it’s harder for them to do their jobs. What I wasn’t expecting – perhaps you weren’t too – is that one of the upshots for the SEC more broadly would be that enforcement officials are reading documents more closely, as Connor Hussey writes.

Mind the gap: Secondaries Investor’s Adam Le has this very informative piece, featured in our April issue (download here), on the common tax-related hazards that can hit your carried interest and, in some cases, scupper deals entirely. “There are a lot of tax pitfalls around ensuring that you preserve capital treatment for your carried interest,” James McCredie, a partner at law firm Macfarlanes, warns. “Don’t trip into it being taxed as income and don’t trip yourself into a dry tax charge.”

Some more good news: KKR has established a pandemic relief fund, Buyouts’ Chris Witkowsky reports. In a letter to limited partners, the firm said its goal was not just to provide financial support, but to “make a meaningful impact for millions around the world.” The $149 billion AUM firm’s two co-CEOs, Henry Kravis and George Roberts, and co-presidents, Scott Nuttall and Joseph Bae, will also be forgoing their salaries and bonuses for 2020.

KKR is the latest in a slew of PE firms to pledge financial relief to portfolio company employees and the wider community, including Advent, Leonard Green, Blackstone and Thoma Bravo.

Email prepared by Graham Bippart and Philippa Kent