(Reuters) – The chairman of the US Securities and Exchange Commission said on Wednesday that the agency will consider new rules that examine how private funds charge investors and measure performance.
Gary Gensler, in a keynote address to members in the board. Institutional Limited Partners Association, added that agency rules would address how funds use separate agreements with investors, so-called "side letters", as a solution to finance statutes.
The supervisory authority hopes that the new rules will alleviate conflicts of interest. between the fund's general partners, affiliates and investors.
Mr. Gensler also said he has asked staff for recommendations to improve the reporting and disclosure of hedge funds through the agency's Form Private Fund, which is required for annual or quarterly disclosure in some cases, to help enlighten regulators on the activities of private fund advisers. [1
"I wonder if fund investors have enough transparency with respect to these fees."  Armed with billions of dollars, buyout companies have exploited what has been a record year for mergers and acquisitions, selling some of their top dollar assets.
M&A deals with private equity backed more than doubled to a record $ 818.4 billion during the first nine months of this year, up from $ 315.2 billion last year, according to Refinitiv.
Me dan large buyout deals have been few and far between this year, some private equity firms have merged to acquire companies for huge sums, which has increased expectations that such "club deals" could happen more often.
Mr. Gensler said he wants a better look at the fees associated with such mega-deals.