The Case for Private Equity Registration

Greetings from the Private Equity Outlook Conference, from the Grand Hyatt in New York City. Sure it’s thrown by our competitors, but they kindly let us in the door.

Ongoing right now is a panel on the role of government regulation in private equity. Jon Persson of Geller & Co. sounded an alarm about propsosed registration requirements for private equity firms, saying that firms might soon be “responsible for the actions of third-party soliciters” (aka placement agents). He added that disclosure rules also could let one placement agent learn that it’s being paid more or less than another. Finally, Persson pointed out that a firm’s “soft money” political contributions could enter the public sphere.

Persson may have been trying to make a case against registration, but what I heard was a litany of welcome changes. Considering the past decade’s abuses of the placement agent system (particularly at pension systems managed by elected officials), additional disclosure could only help. If the results prove embarassing, that says more about a firm’s activities than it does about the legislation.

I actually was on the fence about registration. Thanks for helping me support it Jon….

Note: I’ll be tweeting from the conference today and tomorrow @danprimack