Securities and Exchange Commission fines TPG Capital Advisors, LLC

Yesterday, December 21, 2017, the Securities and Exchange Commission ("SEC") fined private equity giant TPG Capital Advisors, LLC for not explicitly disclosing its use of accelerated management fees, related to funds raised nearly a decade ago. The wrist-slap penalty is $13 million, which is below what some rival firms have been forced to pony up.

  • Accelerated monitoring fees are when a private equity fund signs a long-term "monitoring" agreement with a portfolio company (e..g, 10 years), but is allowed to receive all 10 years of payment even if it sells the company before the term expires. Leaving aside the absurdity of buyout firms getting paid extra to monitor their own investments via a self-dealt agreement, many firms have been found to have not adequately disclosed (let alone shared) those fees with their limited partners.

To read more click here for the SEC's Order Instituting Cease-And-Desist.  

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