SEC Releases Form PF Report

The SEC published its second annual report regarding its use of data collected on Form PF, noting that it continues to use the data in examinations and enforcement proceedings. For example, during an examination, staff will review the form for inconsistencies with other filings and other informjation obtained (from pitch books, offering documents, operating agreements, due diligence reports, etc.). Staff will especially consider the adequacy of disclosure about investment strategies made to investors (e.g., with respect to holdings, leverage, liquidity, derivatives and counterparties). The SEC specifically noted that its Form PF reviews have led to deficiencies letters.

The data is also being used to identify advisers engaging in specific activities that make them worthy targets for exam or enforcement teams. Managers should do this type of review themselves—well before the SEC comes in.

The report also provided some statistical information about advisers and funds:

• More than 2,600 advisers filed Form PF on behalf of roughly 24,000 funds; last year it was 2,300 advisers on behalf of 20,000 funds.

• Approximately 8,000 hedge funds and 7,000 private equity funds are reported on the form; RAUM attributable to these hedge funds is $5 trillion and $1.8 trillion for these private equity funds.

• RAUM for Form PF filers increased by $1.59 trillion from last year (about 22%).

• The value of parallel managed accounts of Form PF filers increased $680 million from last year (about 38%).

• Aggregate gross value of controlled portfolio companies of large PE advisers increased by $1.4 trillion from last year (about 23%).