SI Decade: Inside the biggest regulation changes to secondaries

The US Securities and Exchange Commission’s recently passed rules relating to the GP-led secondaries market have put these deals squarely on LPs’ radars.

“[These rules] raise the visibility of GP-led transactions to LPs and they signal how important and risky those transactions might be,” Igor Rozenblit – managing partner and founder of governance, risk and regulatory services provider Iron Road Partners and the former private equity expert in the Division of Enforcement of the SEC – told Secondaries Investor.

“I wouldn't be surprised for LPs who have already focused on these transactions to focus on them even more… While all the other risks the LPs have always worried about are present, now you've got an additional regulatory risk as an LP that you have to worry about, and LPs are typically very concerned with their exposure to headline risk."

In this fifth episode of the Decade of Secondaries Investing podcast miniseries, we sit down with Rozenblit and Isabel Dische, chair of Ropes & Gray’s alternative asset opportunities group, to discuss the secondaries aspects of the private fund advisers rules under the Investment Advisers Act of 1940 and Form PF rules.

The pair discuss the evolution of the SEC’s focus on this small sub-asset class within the sprawling private markets landscape, what the regulator is looking out for in these transactions, and how GPs, buyers and advisers can navigate best practice as well as reputational risk that could come with these deals.

• For full coverage of our Decade of Secondaries Investing series, including all podcast episodes and an interactive timeline, click here.
• Read: "SEC votes through rules on GP-led secondaries reporting timeline"
• Read: "Rubber stamp speeds up market standardisation"
• Read: "The VSS case and the path toward best practice"
• Read: "Iron Road Partners: Analyst note on American Infrastructure Funds SEC charge"