Private Equity Compliance : Analyzing Conflicts, Fees, and Risks.


Jason A. Scharfman
Bok Engelsk 2018 · Electronic books.
Omfang
1 online resource (227 pages)
Opplysninger
Cover -- Title Page -- Copyright -- Contents -- Preface -- Chapter 1 Introduction to Private Equity Compliance -- 1.1 Introduction -- 1.2 What Exactly Is Private Equity? -- 1.3 Private Equity Terminology -- 1.4 Mandatory Compliance -- 1.5 Voluntary Compliance -- 1.6 Distinguishing Investment and Operational Compliance -- 1.7 Historical General Partner Compliance Efforts -- 1.8 Transition to Increased Regulation of Private Equity -- 1.9 What Is Private Equity Compliance? -- 1.9.1 Portfolio Company Compliance Considerations -- 1.9.2 Compliance Similarities Between Private Equity and All Other Investment Managers -- 1.9.3 Compliance Similarities Between Private Equity and Hedge Funds -- 1.10 Summary -- Chapter 2 Compliance Obligations of General Partners -- 2.1 Understanding the Distinctions Between GP-, Fund-Level, and Portfolio Compliance -- 2.2 General Partner Compliance -- 2.2.1 Fund-Level Compliance -- 2.2.2 Portfolio Company Compliance -- 2.2.3 Distinguishing Between GP-, Fund-Level, and Portfolio Company Compliance -- 2.3 General Partner Board Seat Oversight Considerations -- 2.4 Fund-Level Compliance -- 2.5 GP Compliance Structures -- 2.6 Private Equity Chief Compliance Officers -- 2.6.1 Private Equity Chief Compliance Officers Are Required by Regulators in Most Instances -- 2.6.2 Mandatory versus Voluntary CCO Duties -- 2.6.3 CCO Implementation of a Culture of Compliance -- 2.6.4 Three Types of Private Equity CCO Frameworks -- 2.7 Summary -- Chapter 3 Limited Partner Advisory Committees and Other Boards -- 3.1 Introduction to Limited Partner Advisory Committees -- 3.2 Source of LPAC Responsibilities: The PPM and LPA -- 3.3 There Is Typically No Requirement for an LPAC to Exist -- 3.4 Common LPAC Duties -- 3.4.1 GP Disclosures to LPACs -- 3.5 LPAC Formation Considerations -- 3.5.1 How Many LPs Can Serve on an LPAC?.. - 12.4 MiFID II and Priips Private Equity Transparency Changes.. - 3.5.2 Determining Which LPs Can Serve on an LPAC -- 3.5.3 Importance of Unaffiliated LPAC Members -- 3.5.4 LPAC Compensation -- 3.5.5 LPAC Member Indemnification -- 3.5.6 LPAC Joint Committees -- 3.5.7 Distinguishing Between an LPAC and an Advisory Board -- 3.6 Arguments in Favor and Against LPACs -- 3.7 Summary -- Chapter 4 Valuation Compliance -- 4.1 Introduction to Private Equity Valuation -- 4.2 Introduction to Private Equity Valuation -- 4.3 GP Valuation Committees -- 4.3.1 Valuation Committees Membership and Size -- 4.3.2 Valuation Committees' Meeting Frequency -- 4.3.3 Valuation Committees' Duties -- 4.4 Valuation Policies -- 4.5 Valuation Frequency -- 4.5.1 Valuation Memorandum and Support -- 4.5.2 Use of Third-Party Valuation Consultants -- 4.6 LPAC Valuation Oversight -- 4.6.1 Third-Party Fund Administrators -- 4.7 Case Studies in Valuation -- 4.7.1 Case Study #1: JH Partners, LLC -- 4.7.2 Case Study #2: Oppenheimer -- 4.8 Summary -- Chapter 5 Conflicts of Interest -- 5.1 Introduction to Conflicts of Interest -- 5.2 Defining a Conflict of Interest -- 5.3 Fund Formation Conflict-of-Interest Disclosures -- 5.4 Preexisting Interests and Those Acquired from Other Funds -- 5.5 GP Employee or Affiliate Direct Investments -- 5.6 Front-Running Considerations -- 5.7 Related-Party Transactions -- 5.8 Deal Allocation -- 5.9 Placement Agents' Conflicts of Interest -- 5.10 Case Studies in Conflicts of Interest -- 5.10.1 Case Study #1: Fenway Partners, LLC -- 5.11 Case Study #2: Centre Partners Management, LLC -- Respondent -- Other Relevant Entities -- The Service Provider -- The Service Provider Is Showcased -- Potential Conflicts Remain Undisclosed -- 5.12 Summary -- Chapter 6 Fees and Expenses - Compliance Considerations -- 6.1 Introduction to Private Equity Expenses and Fees -- 6.2 Why Are Fees and Expenses Important to Compliance?.. - 6.3 Transaction Fees vs. Fund-Level Fees -- 6.4 Types of Fund-Level Fees -- 6.4.1 Management Fees -- 6.4.2 Carried Interest -- 6.4.3 Management Fee and Fund Size -- 6.4.4 Side Letters - Fee and Expense Considerations -- 6.5 Fees and Portfolio Company Directorship Conflicts -- 6.5.1 Monitoring Fee Extension -- 6.5.2 Monitoring Fee Acceleration -- 6.6 Operating Partner Fees -- 6.6.1 Operating Partner Background and Roles -- 6.6.2 Compliance Challenges of Operating Partner Compensation -- 6.6.3 Operating Partners and Management Fee Offsets -- 6.7 Case Studies in Fee and Expense Management -- 6.7.1 Due Diligence and Broken-Deal Expenses -- KKR's Private Equity Funds -- KKR Co-Investors -- Broken-Deal Expenses -- KKR's Historical Broken-Deal Expense Allocations -- OCIE Compliance Examination -- Misallocation of Broken-Deal Expenses to Flagship PE Funds -- Deficient Compliance Policies and Procedures -- 6.7.2 Other Fees and Expenses - Case Study #3: Potomac Asset Management Co. -- B. PAMCO's Improper Use of Fund Assets to Pay Portfolio Company Fees -- C. Failure to Offset Advisory Fees -- D. Improper Use of the Funds' Assets to Pay Adviser-Related Expenses -- E. Material Omissions in Forms ADV Concerning PAMCO's Compensation -- F. Violation of the Custody Rule by Failing to Disclose Related Party Transactions in the Funds' Audited Financial Statements in Violation of GAAP -- G. Byron's Failure to Make Timely Capital Contributions to the Funds -- H. Failure to Adopt and Implement Reasonably Designed Compliance Policies and Procedures -- 6.7.3 Other Fees and Expenses - Case Study #4: Lincolnshire Management -- B. The Integration of PCS and CTS -- C. Expense Allocation Policy -- D. Misallocated Expenses -- E. LMI Failed to Adopt and Implement Policies and Procedures to Prevent Violations Arising from Integrating PCS and CTS.. - 6.7.4 Other Fees and Expenses - Case Study #5: Apollo -- 6.7.5 Improper Fee Withdrawals - Case Study #6: SLRA -- 6.8 Summary -- Chapter 7 Private Equity Compliance Technology, Business Continuity, and Cybersecurity -- 7.1 Introduction to the Role of Technology in Private Equity Compliance -- 7.2 Regulatory Focus on Technology Compliance -- 7.3 Cybersecurity Compliance Implications -- 7.3.1 Penetration Testing -- 7.3.2 Vendor Cybersecurity Risks -- 7.4 Data Rooms -- 7.4.1 GP Sharing Data with Limited Partners -- 7.4.2 GP Sharing Data with Underlying Companies -- 7.4.3 GP Sharing Data Among Its Employees -- 7.4.4 Business Continuity Planning and Disaster Recovery -- 7.5 Summary -- Chapter 8 Understanding Private Equity Compliance Documentation -- 8.1 Introduction to Key Private Equity Compliance Documents -- 8.2 Purposes of Documenting Compliance -- 8.3 Benefits of Documenting Compliance -- 8.3.1 Regulatory Required Documentation -- 8.3.2 Communication of Compliance Policies to GP Employees -- 8.3.3 Facilitating Investors' Understanding of Compliance -- 8.3.4 Service Provider Insights into GP Compliance -- 8.3.5 Change Management Compliance -- 8.4 Distinguishing Legal and Compliance Terms in Fund Offering Documents -- 8.5 Key GP Compliance Documentation -- 8.5.1 Compliance Manual -- 8.5.2 Code of Ethics -- 8.5.3 Electronic Communication and Social Media Policies -- 8.5.4 Other Compliance Documents -- 8.6 Case Study: WL Ross &amp -- Co. LLC -- A. Background -- B. WL Ross' Historical Transaction Fee Allocation Practice -- C. 2014 OCIE Examination, WL Ross' Remediation, and Implementation of New Allocation Methodology -- 8.7 Summary -- Chapter 9 Compliance Training, Surveillance, and Testing for Private Equity Firms -- 9.1 Introduction to Private Equity Training, Surveillance, and Testing -- 9.2 Growth of TST -- 9.3 Compliance Training.. - 9.3.1 Firm-Wide Compliance Training -- Acknowledgment Form for Code of Ethics -- 9.3.2 Department- and Issue-Specific Training -- 9.4 Distinguishing Compliance Testing and Surveillance -- 9.5 Testing and Surveillance Scope -- 9.6 Implementing Compliance Testing -- 9.6.1 Testing Schedules -- 9.6.2 Testing Frequency -- 9.7 Incorporating Mock Audits into Testing -- 9.8 Compliance Surveillance Implementation -- 9.9 Analyzing Testing and Surveillance Data -- 9.10 Corrective Action -- 9.11 Compliance Violations Do Not Necessarily Imply GP or Fund Profits -- 9.12 Summary -- Chapter 10 Limited Partner Analysis of Private Equity Compliance Functions -- 10.1 A Compliance Evaluation Is Part of the Overall Due Diligence Process -- 10.1.1 Focus on GP Compliance -- 10.2 Goals of Investor Compliance Analysis -- 10.2.1 Signaling Effect of Compliance Due Diligence -- 10.2.2 Evaluating the GP's Compliance Culture -- 10.3 Distinguishing Initial versus Ongoing Compliance Due Diligence -- 10.4 Initial Compliance Due Diligence Process -- 10.5 Incorporating Vendors into Compliance Policies -- 10.5.1 Valuation Policy Vendor Example -- 10.5.2 Potential Penalties for Lack of Vendor Oversight Procedures -- 10.6 Case Study: Blackstreet Capital Management -- FACTS -- (i) Political Contributions -- (ii) Charitable Contributions -- (iii) Entertainment Expenses -- 10.7 Summary -- Chapter 11 Interviews with Private Equity Compliance Professionals -- 11.1 Biography and Interview with Dr. Thomas Meyer -- 11.2 Biography and Interview with Matthew DeMatteis - Institutional Limited Partners Association (ILPA) -- 11.3 Biographies and Interview with Claire Wilkinson and Ludovic Phalippou -- Chapter 12 Compliance Trends and Future Developments -- 12.1 Introduction -- 12.2 Specialized Regulatory Focus on Private Equity -- 12.3 Focus on Private Equity Fee Transparency.
Emner
Sjanger
Dewey
ISBN
9781119479642
ISBN(galt)

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