SEC Staff Publishes Private Funds Statistics Report

The Securities and Exchange Commission staff today published a report that provides private fund industry statistics and trends, reflecting aggregated data reported by private fund advisers on Form ADV and Form PF.  Most of the data in the more than 50 separate tables and figures is being made public for the first time. 

“We believe that investors evaluating investments in private funds will benefit from access to this additional information about the private funds and their advisers,” said SEC Chair Mary Jo White.  “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 organizational and operational information, fund size and ownership.

Form PF is filed by SEC-registered investment advisers with at least $150 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 (e.g., 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 staff prepared the report, which reflects information reported from the first calendar quarter of 2013 through the fourth calendar quarter of 2014.  The staff intends to update the private fund statistics report periodically. 

The report 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.

Adopted in October 2011, Form PF implemented Section 404 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which directed the Commission to establish reporting requirements for advisers to private funds to report information for use by the Financial Stability Oversight Council (FSOC) in monitoring risk to the U.S. financial system.  The Commission uses information obtained from Form PF in its regulatory programs and investor protection efforts relating to private fund advisers.