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Private equity update: Optimistic for more deal activity

March 22, 2016 Leave a comment

magnifying_glassDeal volume in Q4 2015 was very high, with many private equity firms charging hard for year-end closes. However, January experienced a slower pace for deal volume. Our team suspects many private equity firms were evaluating their portfolios, if sellers will adjust their pricing, and evaluating any potential impact from China’s economy.

In addition, the actions and commentary of the Fed in January when it comes to raising interest rate, has provided some uncertainty.

With February behind us, and only a few weeks away from the end of Q1, activity has steadily increased, and it appears as if the rest of 2016 will continue to follow suit. Deal flow has increase quite well, and in speaking with deal professionals and advisors, many seem to be cautiously optimistic for 2016 overall, as pipelines are filling up. Read more…

SEC sets it’s focus on private equity

December 23, 2015 Leave a comment

cost_comparisonThe SEC took enforcement action via an order dated November 23, 2015 that JH Partners, LLC failed to disclose potential conflicts stemming from insider loans and a cross-fund investment, in addition to permitting violations of fund concentration limits. According to the order, JHP violated two sections of the Advisers Act of 1940: Section 206(2) prohibiting an investment adviser from participating “in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client,” and Section 206(4) prohibiting any “fraudulent, deceptive, or manipulative act, practice, or course of business by an investment adviser to an investor or prospective investor in a pooled investment vehicle.”

The SEC has amped up their regulatory focus on private equity as of late, and consistently emphasized the requirement of disclosing any and all conflicts of interest. The action taken against JHP stresses the significance of providing disclosure to limited partner advisory committees and advance LPAC approval of investments that may result in potential conflicts, different priorities in a portfolio company’s capital structure, and different valuations for respective investments and cross-fund investments. Read more…