Risk alert: The Institutional Limited Partners Association’s Chris Hayes says the recent SEC risk alert to the private funds industry should be read as a reckoning, both for the industry and its regulators. Hayes gives his thoughts on fees and expenses, conflicts of interest and fiduciary duty, and his concern that the nature of fiduciary duty in the industry allows “more and more of the risk” to be shifted onto investors.
The risk alert was issued in June and was based on the findings of the Office of Compliance Inspections and Examinations. In case you missed it, here is a rundown of the key findings, and here is a look specifically at the calling out of conflicts of interest in co-investment practices mentioned in the alert.
Email prepared by Graham Bippart