Two paradoxes (sort of)

LPs hate fees (even more than last year); and 2020: an election year with a lot of regulatory initiatives

LPs hate fees: As promised back in November, PEI has published its LP Perspectives survey. Here, I take a look at some of the results regarding investors’ thoughts on fees and transparency. On the surface, the results shed light on a paradox: disclosure on fees and expenses has improved, as have management offsets; and yet investors are increasingly frustrated by fees, with a large majority saying they’re difficult to justify. In November, a frustrated Wayne Moore, trustee at LACERA, tried at a House Financial Services Committee hearing on PE to draw some attention to investors’ desire for greater and better disclosure on fees. Alas for LPs, committee members’ hearts were already won by the returns on offer to investors like LACERA. He barely got a full sentence in about fees.

2020 paradox: From the folks at Regulatory Compliance Watch. Presidential election years are not known for their regulatory predictability, but 2020 may be different, compliance prognosticators say. Reg BI “is going to be very confusing and not well received” said one regulatory consultant, presumably while staring gravely at spent tea leaves. Another said it will be a big year for advisor regulations. More states may pass privacy laws akin to California’s. And, of course, there will be volatility with a chance of significant correction.

Email prepared by Graham Bippart