SEC Looks Closer at Stapled Secondaries — Market Talk

18 June 2015

Dow Jones Institutional News

11:52 EDT – Stapled secondary deals are coming under heightened scrutiny from the SEC, which is looking closely at whether private-equity firms are misleading or shortchanging sellers in these complex transactions. In them, investors in a P-E firm’s existing funds get the option to sell their portfolio stakes to new buyers who pledge additional fresh capital to the firm’s latest fund. “We’re looking to see how fiduciary duty is executed in that context,” Igor Rozenblit, co-head of the private-funds unit at the SEC’s Office of Compliance Inspections and Examination, said at the SuperReturn US 2015 conference. “The other thing we’re looking at is offering fraud.” (dawn.lim@wsj.com)