Mon, Nov 26, 2018

Duff & Phelps’ European Alternative Investments Conference Survey Results Featured in PFM Report on SMCR

Private Funds Management (PFM), which delivers the most crucial financial, operational and legal news functions globally to professionals within private equity firms, referred to survey results from Duff & Phelps recent European Alternative Investments Conference to highlight the importance of the Senior Managers Certification Regime (SMCR).

Dubbing SMCR as what will be the most important acronym for UK-focused asset managers in 2019, PFM drew on the conference’s survey results to illustrate that most valuation professionals were ill-prepared to take on the responsibility that SMCR demands, with 39% needing more information, and 39% not willing to take on the responsibility at all. Only 23% of participants felt ready and willing to take on the responsibilities that SMCR entails.

The SMCR, which will be introduced by the Financial Conduct Authority at the end of the year, will replace the Approved Persons Regime. SMCR is pertinent to all aspects of operation in the context of private equity, but particularly valuations. The reluctance illustrated by the survey results are justified, as SMCR will increase the scope of accountability to parties involved - and their culpability. The contradiction being that to accurately value portfolio companies, input is required from a range of people, and while the deal team likely have best insight into the performance of portfolio companies, responsibility will naturally fall upon the C-suite (especially the Chief Financial Officer).

Anticipating these findings, Duff & Phelps dedicated a workshop at the European Alternative Investments Conference specifically to SMCR in an effort to arm and educate conference attendees.

Read the full article in Private Funds Management


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