The Securities and Exchange Commission (SEC) has for the first time used aggregated data reported by hedge fund and private equity advisers on Form ADV and Form PF to publish a report on private fund industry statistics and trends.
The report, which includes more than 50 separate tables and figures, includes statistics about the distribution of borrowings, an analysis of hedge fund gross notional exposure to net asset value, and a comparison of average hedge fund investor and hedge fund portfolio liquidity.
“We believe that investors evaluating investments in private funds will benefit from access to this additional information about the private funds and their advisers,” says SEC Chair Mary Jo White (pictured). “These statistics also should facilitate constructive feedback and additional analysis that could be used by the Commission and others.”
Form ADV is used by investment advisers to register with the Commission and/or certain state securities authorities. Advisers must report on Form ADV general information about private funds that they manage, such as basic organisational and operational information, fund size and ownership.
Form PF is filed by SEC-registered investment advisers with at least USD150 million in private funds assets under management to report information about the private funds that they manage. Most advisers file Form PF annually to report general information such as the types of private funds advised (eg, hedge funds or private equity), each fund’s size, leverage, liquidity and types of investors. Certain larger advisers provide more information on a more frequent basis (including more detailed information on certain larger funds).
The SEC’s Division of Investment Management’s Risk and Examinations Office prepared the report, which reflects information reported from the first calendar quarter of 2013 through the fourth calendar quarter of 2014. The SEC is planning to update the report ‘periodically’.