SEC examiners will be paying closer attention to how private equity firms handle secondary transactions, Igor Rozenblit said Wednesday at a global private equity conference in Washington.
Mr. Rozenblit is co-chairman of the private fund unit within the Securities and Exchange Commission's office of compliance inspections and examinations, which has been focusing on conflicts of interest between general partners and limited partners, and ancillary asset classes like real estate. The unit is now “thinking about” scrutinizing how much information is provided to old and new investors in secondary transactions, he said, “particularly if there is a decline in the economy.”
“You have to really wonder if the manager is doing his fiduciary duty,” Mr. Rozenblit said.
Asked whether the SEC is getting more critical of how private funds disclose their fee practices to investors, Mr. Rozenblit said: “Our notion is that if something is going on in your fund that is complex, investors should know about it, no matter what it is.”