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Reuters – U.S. hedge funds and private equity firms told Congress on Tuesday that all advisers to private pools of capital should be subjected to the same level of federal scrutiny, including those managing venture capital funds.
A draft U.S. bill would require advisers of hedge funds and private equity funds to register with the Securities and Exchange Commission, thus forcing more disclosures to regulators and investors.
However, the draft House of Representatives bill exempts venture capital funds from mandatory registration with the regulator.
New York (HedgeCo.net) – Richard H. Baker, President and CEO of the Managed Funds Association (MFA) wrote a letter to MFA members this afternoon, highlighting today’s announcement by the Obama Administration requiring all advisers to hedge funds and other private pools of capital, including private equity and venture capital funds, to register with the Securities and Exchange Commission (SEC).
Baker highlights how the Administration’s proposed legislation would:
* eliminate the private adviser exception in the Investment Advisers Act and require hedge fund managers and other investment advisers to private investment pools with at least $30 million in assets under management to register with the SEC;
* eliminate the exemption from registration in the Advisers Act for certain commodity trading advisors registered with the CFTC if the commodity trading advisor acts as an investment adviser to a private fund (defined as a company that would be an investment company under the Investment Company Act of 1940 but for the exceptions contained in Section 3(c)(1) or Section 3(c)(7));
* give the SEC authority to require investment advisers to maintain records and submit reports of information relating to both the adviser and funds it manages, in order to allow for the supervision of systemic risk by the Board of Governors of the Federal Reserve and the Financial Services Oversight Council, and to provide such information to the Board and Council. The reported information must include at least, for each private fund, the amount of assets under management, use of leverage (including off-balance sheet leverage), counterparty credit risk exposures, trading and investment positions, and trading practices. Each adviser must maintain records of such information and make them available to the SEC upon request, and would be subject at any time to periodic, special, or other examinations by the SEC. Information provided by the SEC to the Board or Council would be kept confidential.
* give the SEC authority to require investment advisers to provide reports, records and other documents of private funds to investors, prospective investors, counterparties, and creditors, for the protection of investors or the assessment of systemic risk.
* permit the SEC to keep confidential any information in reports required to be filed with the SEC, except pursuant to requests from Congress or other federal agencies
* provide the SEC with the authority to define the term ‘client’ differently for different purposes of the Advisers Act and clarify other aspects of the SEC’s rulemaking authority with respect to registered investment advisers.
Click here to read the Administration’s press release announcing the proposed legislation.
CNBC – The Obama administration has sent legislation to Congress that would bring hedge funds and other private pools of capital under government supervision.
The proposal calls for the Securities and Exchange Commission to oversee hedge, private equity and venture capital funds. By registering with the SEC, their books would be open to federal inspection and they would be subject to disclosure requirements to investors and creditors.
West Palm Beach (HedgeCo.net) – Hedge fund manager Meridian Global Fund Services Group has launched a hedge fund consulting affiliate team with Joyce E. Heinzerling as head.
The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.
“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.
"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.
Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds.
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Reuters Blogs – It seems that private equity fund sales are heating up so much they need their own market.
SecondMarket said today it is opening trading in limited partnership interests in private equity funds, venture capital funds, hedge funds and fund of funds (the intention to launch into this market was reported a few weeks ago by our sister publication peHUB).
The firm also hired Jeffrey Bollerman, previously at Citigroup Wealth Management, to help lead its LP interest market.
West Palm Beach (HedgeCo.net) - Morrison & Foerster LLP is announced the election of ten new lawyers into their partnership, including specialists in venture capital, hedge funds, bio-technology, patents, corporate transactions and chapter 11 bankruptcy, among others. Their election is effective January 1, 2009.
“We have elected an exceptional group of lawyers to the partnership. This year’s newly elected partners reflect continued investment in our distinguishing practice strengths and our international reach,” said Keith Wetmore, Chairman of Morrison & Foerster. “Our new partners have demonstrated a commitment to client service and legal excellence. We are confident that they will make tremendous contributions to our clients’ success and our Firm’s progress in the years ahead.”
Elected as Partner Thomas M. Devaney, a member of the Business Department, will be resident in the New York office. Devaney specializes in private equity fund formation and investment, representing a variety of domestic and international private equity funds, including real estate funds, venture capital funds, and debt funds, in addition to hedge funds with a broad range of investment strategies.
The other lawyers elected as Partners are; Anders T. Aannestad, Jonathan Bockman, Christopher B. Eide, James M. Halstead, Rebekah Kaufman, David E. Melaugh, James J. Mullen III, Ph.D., Norman S. Rosenbaum, and Ivan G. Smallwood, a resident in the Tokyo office.
