Need To Know

SEC Meets On Registration Deadline Delay

The SEC is holding a meeting on June 22 to discuss a Dodd-Frank financial reform law mandate that most private equity firms register with the agency as investment advisers. It is expected that a representative of the SEC’s division of investment management will recommend that the July 21 deadline for registration be extended to the first quarter of 2012, a source told Buyouts. Robert E. Plaze, an associate director with the division of investment management, wrote in an April 8th letter that he expected the SEC would grant such an extension. The Dodd-Frank proposal, which calls for firms with $150 million or more in assets to register as investment advisers, has met with fierce opposition among mid-market private equity firms.

Exempt PE Firms Not Quite Exempt

Venture capital firms and buyout shop with less than $150 million in assets aren’t quite exempt from Dodd-Frank reporting requirements, according to a recent report by affiliate peHUB discussing Austin Ventures‘s recent hiring of a combined general counsel and chief compliance officer. In November 2010, the SEC issues proposed rules noting that, under Dodd-Frank, it requires ongoing record-keeping by exempt firms, “which we have the authority to examine.” Exempt firms would also have to submit and periodically update a modified version of a publicly available form called Form ADV that would include details on other businesses the firm is engaged in, disciplinary history of firm executives and other information.

UK Scrutinizes Blackstone

British Business Secretary Vince Cable called on his department to investigate the role of private equity firms in public services, the BBC reported June 6. The request follows the near collapse of Southern Cross Healthcare Group, the UK’s largest home-care operator, which Blackstone owned from 2004 to 2006. Problems at the company, which helps care for 31,000 elderly people, developed mostly from sale-and-lease-back property deals that stripped out the underlying property and burdened the company with too much debt, according to The Wall Street Journal. In a statement, Blackstone suggested the company’s struggles surfaced after its ownership. “As with any investment formerly owned by the funds we manage, Blackstone was not responsible for the wider economic climate and controlled neither the debt levels nor any additional transactions entered into by the newly independent public company,” Blackstone said in a statement the BBC cited.

Riverside Co. Exec To Head Euro PE Lobby

The European Private Equity and Venture Capital Association recently elected Karsten Langer, a partner with mid-market buyout shop The Riverside Co., as its new chairman. Langer, who joined Riverside in 2006, has helped represent the private equity and venture capital industries with respect to a new European Union regulatory regime called the Alternative Investment Fund Managers Directive. Langer is an economics graduate from Copenhagen Business School and speaks six languages, according to a press release from the trade group.