SEC Asset Management Unit’s Inquiry Targets Private Equity Fund Sponsors’ Practices

Recent media reports have detailed a confidential inquiry launched by the U.S. Securities and Exchange Commission ("SEC") Division of Enforcement's Asset Management Unit ("Asset Management Unit") that requires various unnamed private equity fund managers to produce documents and information relating to multiple areas of their operations and practices, including, among others, fundraising and marketing materials, valuations of realized and unrealized investments (including support therefor), accounting policies and investor communications. The SEC's nonpublic request for information included a standard statement that it should not be viewed as an indication that any specific securities laws violations have occurred. However, other recent public statements by senior SEC officials make clear that the Asset Management Unit is undertaking a broad industry review of private equity funds and managers to target those sponsors warranting further investigation. In particular,