Happy new year!
The SEC agenda: Here, I’m publishing the SEC’s regulatory schedule for the year, from sister publication RCW. It’s a big agenda that includes some of chairman Jim Clayton’s top priorities. Among them, of course, is the desire to open up private markets to retail investors. The director of the SEC’s corporate finance division, William Hinman, is tipped to be keen to discuss the topic at the CFOs & COOs Forum, where he will be a keynote speaker.
We’ll be talking a lot about this as it develops. However, if the SEC does expand the ‘accredited investor’ definition, my guess is the mid- to long-term upshots will likely include 1) an increase in enforcements against funds for offenses related to fees, expenses and valuations; 2) a fresh influx of money into private markets, probably via new retail-pooling funds of funds more than individual investors (at least when it comes to investing in the funds of more recognized players); and 3) further down the road, probably more reporting and disclosure requirements. The question would then become whether big names embrace or avoid direct and indirect retail investment in their funds. I’d guess at least a few want to avoid being taken down paths 1) and 3), especially those already able to be selective about which LPs they do business with.
On the other hand, if the SEC’s initiative fails, maybe more retail investors will just set up their own private equity investment clubs. It’s a real thing.
Succession planning: Hamilton Lane kicked off the new year by appointing a new CFO and treasurer, as industry veteran Randy Stilman prepares to retire. TowerBrook and, of course, KKR are among the other firms to have announced CFO appointments relatively recently. You can almost certainly expect more of these in 2020.