Emerging Trends in Investment Funds – The New Private Fund Advisers Rules

Investment management partner Jeff Blumberg participated in a panel at the 2023 Annual Rocky Mountain Fund Advisors Summit. The panel first highlighted several enforcement actions detailing conduct that the SEC is clearly trying to end through the enactment of the New Private Fund Adviser Rules (the New Rules), specifically, lack of transparency, conflicts of interests and governance mechanisms. Blumberg discussed a recent lawsuit filed against the SEC which alleges that the SEC exceeded its statutory authority in passing the New Rules. He commented that he views the case against the SEC as having some likelihood of success, albeit the breadth of any such success difficult to predict.

The panelists then provided an overview on three of the more impactful components of the New Rules: (i) Private Fund Quarterly Statements Rule; (ii) Private Fund Adviser Audits Rule; and (iii) Preferential Treatment Rule.