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.