Friday, May 21, 2010

Private Equity Gets Exemption From Regulatoy Reform

The House and Senate versions of the financial reform bill require hedge-fund advisers to register with the Securities and Exchange Commission. Both versions exempt venture capital firms from registration. A little noticed change in the version passed by the Senate on Thursday night, however, would also exempt private equity firms, reports CNBC's John Carney.

If that exemption survives the reconciliation process, it will mean that private equity funds would not have to register with the Securities and Exchange Commission. Instead, the bill simply calls for the SEC to determine what sort of records it would like private equity firms to file.

Carney notes that the venture capital community fought hard and publicly for its exemption. The exemption of private equity firms, however, went into the Senate bill with much less fanfare.

I guess it pays to be on the A list. David Rubenstein, co-founder of insider dominated private equity firm, The Carlyle Group, has been named to two "A" Lists in recent weeks.

He was placed on the "A" list of Wahingtonian magazine, along with President Obama andTreasury Secretary Tim Geithner, among others. He was also placed on the much shorter list put out by the  Capital Comment blog that bills the list as "A monthly roundup of people we’d like to have over for drinks, food, and conversation. " Others on that list include  Valerie Jarrett and Liz Cheney. 

Capital  Comment calls Rubenstein "the  increasingly visible Carlyle Group leader."

More great news for Rubenstein and the like from Carney:
There’s a possibility that this loophole might grow wider. The Senate bill leaves it to the SEC to define what counts as a venture capital fund and a private equity fund. This creates the potential for some hedge fund managers to attempt to game the system by influencing the SEC’s decision or remodeling themselves to fit whatever legal definitions the SEC puts forth.


  1. Chris Dodd had private equity's back from the beginning:

  2. Rubenstein and Schwarzman lobbied in the Capital yesterday. The Private Equity Council mobilized the big guns:

  3. Obama's Oil Spill Commission has a PEU co-chair. William Reilly is a Senior Advisor for TPG.