SEC's Game-Changing Reforms For Private Funds

On August 23, 2023, the Securities and Exchange Commission (SEC) agreed on amendments to the Investment Advisers Act of 1940 (Advisers Act) in order to enhance regulation to private fund advisers and protect investors with the unprecedented growth in the investment class over the last decade as well as a perceived lack of transparency. According to McKinsey's Global Private Markets Review (March 2023) total assets under management reached $11.7 trillion as of June 30, 2022, with an annual growth of 20% since 2017. This sweeping regulation marks the first significant change in regulation enacted since Dodd-Frank in 2010 to address the calls for increased scrutiny from investors and regulators.