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Chris Addy, Castle Hall:

In February 2022, the SEC proposed a new rule on private fund advisers which, given the numerous changes proposed (across 342 pages!) collectively represents an enormous update to the regulators' requirements for the alternative asset industry. Indeed, this is likely the biggest change since the 2012 rules which made registration mandatory, not optional, for hedge and private markets managers. After 18 months of discussion, the rule will now be voted on next week So what are the changes as proposed?

1) Quarterly statements

Every Registered Investment Adviser must, within 45 days of quarter end, deliver a formal statement to the investors in every private fund they manage (a "private" fund in SEC terminology represents a fund which is not registered under the 1940 Act (i.e. a public / mutual fund) - that means a hedge fund, private equity fund, private credit fund and, where the adviser is registered, real estate and VC structures).

Fee and expense disclosures:

for every fund, the asset manager must disclose:

(i) the manager's own compensation including management, incentive and any other fees paid to the manager. This includes any fees received directly by the officers and partners of the management company - this captures items such as directors fees and other fee income from portfolio companies;

(ii) a detailed accounting of all fees and expenses paid by the fund that quarter, with a separ......................

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