Coalition of Public Pension Officials Call on SEC to Require Consistent, Clear Disclosure of Private Equity Fees


A coalition of 13 state treasurers and comptrollers – all of whom serve as trustees of their state’s respective pension systems – collectively called on the SEC this week to require more consistent and transparent fee disclosure from the private equity industry.

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In a letter to SEC Chair Mary Jo White, the state treasurers and comptrollers wrote that opaque and complex private equity cost structures have led to “an uneven playing field” between general and limited partners.

“It’s time to take the detective work out of how private equity managers report their fees,” New York City Comptroller Scott Stringer said. “Billing practices are cryptic at best and many partnership statements are so vague they could be considered purposefully opaque.”

In particular, the pension leaders wrote among the four types of private equity expenses, only directly billed management fees are regularly disclosed to investors.

Others—fund expenses, allocated incentive fees, and portfolio-company charges—are buried in annual financial statements and not detailed to investors on a quarterly basis, the letter said.

Furthermore, they argued the opacity in fee calculations has made consistent disclosure of private equity expenses to the public “extremely challenging.”


“In the absence of a clearly defined standard, states that voluntarily disclose more comprehensive accounts of total fees and expenses are put at a disadvantage in state-to-state comparisons,” the state pension funds said.

Read the full letter here.


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