In light of recent market volatility, we are reminding private fund advisers of their obligations under the SEC’s Form PF current reporting requirements, which came into effect in December 2023.
Under the amended Form PF rules, certain events must be reported within 72 hours of occurrence for large hedge fund advisers, and within 60 days of quarter-end for private equity fund advisers.
Large hedge fund advisers
The amendments require large hedge fund advisers (i.e., hedge fund advisers with at least $1.5 billion in hedge fund assets under management) and all private equity fund advisers to file reports upon the occurrence of certain reporting events that could indicate significant stress at a fund and that could raise investor protection issues.
Reporting events for large hedge fund advisers include:
- Certain extraordinary investment losses, defined as a loss equal to or greater than 20% of a fund’s reporting fund aggregate calculated value (RFACV) over a 10-business-day period
- Significant margin and default events
- Terminations or material restrictions of prime broker relationships
- Operations events, defined as when the adviser or reporting fund experience a “significant disruption or degradation” of the reporting fund’s “critical operations”
- Events associated with withdrawals and redemptions.
Private equity fund advisers
Reporting events for private equity fund advisers include:
- The removal of a general partner
- Certain fund termination events
- The occurrence of an adviser-led secondary transaction.
In addition, large private equity fund advisers (i.e. private equity fund advisers with at least $2 billion in private equity assets under management) will be required to report information on general partner and limited partner clawbacks as well as additional information on their strategies and borrowings
Given the ongoing volatility, we encourage advisers to review their monitoring processes to ensure timely detection and escalation of relevant events that may trigger a reporting obligation.
If you have questions about how these requirements apply to your specific situation, please don’t hesitate to contact us.
