The San Francisco Office of the SEC has an informal inquiry into the valuations of private equity funds. IA Watch has received a copy of the sweep letter from the Division of Enforcement directed to a private equity fund manager.
Some highlights in the request:
- All formation and offering documents for the fund, including private placement memoranda, limited partnership agreements, and operating agreements
- List of investors and capital commitments
- List of all investments, realized amount, and gross IRR
- All communications with investors regarding fund performance
- Support for valuations of the fund assets for the most recent fiscal year
It seems to be a fairly short list for an SEC document request. But any SEC document request is intimidating.
The request shouldn’t be construed as indication that there has been a violation of the federal securities law. It’s indication that the SEC is continuing to look for funds and managers that manipulated valuations.