Understanding PE fee reporting standardization, areas of weakness and potential for abuse

Wed, Jul 20, 2016 1:00 PM – 2:00 PM EDT

In 2014, the Securities and Exchange Commission director explained in what is now oft called the sunshine speech that when fees and expenses were examined, they identified what the SEC believed to be “violations of law or material weaknesses in controls over 50% of the time.”[1] Private equity investment fees and costs have persisted in the industry headlines since that time but what are the facts and how what we have learned from the examination findings impacts the role of the due diligence professional today?

Understanding the push towards fee reporting standardization as well as the areas of weakness and potential for fees and expense abuse will better prepare you for the future.   This webinar will discuss the types of deficiencies that were identified, the trends in LPA negotiations today as a result and how fee reporting standardization such as the Institutional Limited Partners Association (ILPA) fee template may play a part.

Learning objectives:

• Understanding of the different examples of deficiencies raised by the SEC
• How this knowledge is shaping LPA terms today
• What are the aims of the ILPA fee template

This webinar is an interactive session. The IMDDA encourages participants to submit questions prior to the program as well as during the session.

View Recording

Meet your Instructors

Lorelei Graye, the plan sponsor consultant for Conifer Financial Services, is a frequent conference speaker and subject matter expert in public pension needs surrounding investment fee reporting. Prior to joining Conifer, she served the South Carolina Retirement System Investment Commission (RSIC) as a reporting officer where she spearheaded the development and implementation of the annual fee collection, validation, and reporting process which was featured in the CEM Benchmarking study, “The Time Has Come for Standardized Total Cost Disclosure for Private Equity” ^[1].

A strong proponent of industry reporting standardization and especially focused on public pension needs, Ms. Graye supports and participates in all facets of the Institutional Limited Partners Association (ILPA) Fee Transparency Initiative ^[2].  Lorelei holds dual business degrees: a B.S. in finance and a B.A. in accounting summa cum laude.

^[1] Dang, Andrea CFA; Dupont, David CFA; and Mike Heale. ““The Time Has Come for Standardized Total Cost Disclosure for Private Equity.” www.cembenchmarking.com. April 2015. CEM Benchmarking.
^[2] ILPA Press Release dated January 29 2016 www.ilpa.org

David B. Parrish is a partner at Jackson Walker, a member of the firm’s Corporate & Securities and Energy practice groups and is the head of the firm’s Investment Funds group. Mr. Parrish focuses his practice on assisting institutional investors with investments in alternative assets. Mr. Parrish regularly represents domestic and foreign investors in reviewing and negotiating investment documentation (including limited partnership agreements, subscription agreements, and private placement memoranda) and in negotiating and preparing side letters. In addition, Mr. Parrish regularly advises investors in advisory board matters, fund dissolutions, co-investments and secondary transactions. Mr. Parrish’s experience in alternative investments includes private equity buy-out, venture capital funds, distressed debt and asset funds, energy funds, emerging manager funds, real estate and timber funds, infrastructure funds, hedge funds and funds of funds.

Mr. Parrish assisted the Institutional Limited Partners Association (“ILPA”) with the development of the ILPA Ratings Tool, an application to qualitatively analyze private equity fund documentation against the ILPA 2.0 Principles. Mr. Parrish also teaches introductory and advanced classes on private equity on behalf of ILPA. Mr. Parrish is a member of the National Association of Public Pension Plan Attorneys (“NAPPA”) and serves on the Negotiation Taskforce of NAPPA’s Alternative Investments Working Group. In addition, Mr. Parrish is a member of the Institutional Investor committee of the Business Law section of the American Bar Association, a member of the Texas Association of Public Pension Attorneys and is a frequent speaker on reviewing and negotiating private equity limited partnership agreements, including at conferences sponsored by ILPA, the University of Texas McCombs School of Business and Harvard University.

Mr. Parrish received his B.A. degree, with honors, in Political Science from the University of Texas – El Paso, and received his J.D. degree, summa cum laude, from the University of Houston Law Center, where he was Chief Articles Editor for the Houston Law Review, a member of the Order of the Coif, and a member of the Order of the Barons. Mr. Parrish is licensed to practice law in the State of Texas.