Thu, Jul 7, 2016

Best Practices for Private Fund Fee, Expense Allocations

As the focus on private fund advisers increase and SEC investigations continued to progress, a growing amount of violations relating to fee and expense allocations have come to light.  Given the complexities of fee and expense allocations, the Institutional Limited Partners Association launched a Fee Transparency Initiative with a goal of establishing “robust and consistent standards for fee and expense reporting and compliance disclosures among investors, fund managers, and their advisors.”  Furthermore, third-party service providers are increasingly being approached to perform fee and expense assessments to determine whether existing fee and expense allocations practices are in compliance with investor agreements.  Managing Director Ann Gittleman and Vice President Deanna Tam discuss how advisers should focus on increasing transparency in their disclosures and ensure controls are in place to monitor fee and expense allocations along with providing case studies that illustrate best practices associated with expense allocation.

Read the article on law360.

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