Change you can believe in (Editor's letter)

We were pleased last month to see a record turnout for our annual Private Equity COO & CFO Forum in New York. You’ll not be surprised to learn that the event was better attended than was the one held a year earlier. In January of 2009, many people in private equity firms specifically were scrambling to ensure that their businesses were not about to evaporate. 

Last month the mood was different. There was a sense that it was time to get on with business, that the world was not about to end. There was also an acknowledgement that serious challenges lay in wait, but at least people now know what those challenges look like. 

The time really, truly has arrived to improve systems and practices at the firm level – changes that have been pushed off for too long. At our conference, pens and papers were out and it was clear that these firm managers would be taking actionable intelligence back to their colleagues. 

Among the real-world scenarios discussed: the seemingly imminent day when most US private equity firms will be required to become Registered Investment Advisors. It turns out there is a two-part form you need to have to begin this process (sound of 300 scribbling pens).

SEC compliance is function that one can prepare for. There are other things in life over which one has less control – take for example a tax rise on carried interest. A poll of our audience found that of the several looming regulatory and tax changes on the horizon, a potential tax raise on carried interest was deemed the scariest. Little wonder – this is a change that is handed down from on high. Unlike compliance, it’s a change that one can’t dress up has having beneficial side effects. 

But in this PEM Monthly you’ll read plenty about changes in regulatory world that will leave you feeling mostly empowered, as opposed to the opposite. 

Best,