And how does that break down by size of firm? Of the just over 7,000 buyout funds under the SEC’s watch, 2,888 of them are managed by some 200 sponsors with at least $2 billion in AUM, according to the report, Annual Staff Report Relating to the Use of Data Collected from Private Fund Systemic Risk Reports. Those large sponsors alone control portfolio companies with aggregate gross value of $7.4 trillion, a figure that is up about 23 percent from $6.0 trillion in last year’s report. (To obtain this figure, the SEC tallies how much sponsors report as the aggregate gross value of their controlled portfolio companies, including debt; this could lead to double-counting if firms in club deals include the same company in their numbers.)
Under the Dodd-Frank Act, all buyout firms with at least $150 million in assets under management were required to become registered investment advisers starting in 2012. The act also directed the SEC to gather information about registered managers of private funds, including hedge fund managers, in part to help the Financial Stability Oversight Council monitor systemic risk in the economy. The SEC introduced Form PF in 2011 to gather information such as types of funds managed, assets under management and how much leverage fund managers use in their investments. Many buyout firms provide basic information through the form once a year. Those with at least $2 billion in private equity assets must provide additional data, including information about investments made in financial institutions.
Below are other statistics and highlights from the report, which is the second produced by the SEC:
• Among registered advisers of private funds are firms that manage 1,397 real estate funds with $354 billion in assets under management, 393 venture capital funds with $30 billion under management, 3,680 other private funds with $975 billion under management and 7,790 hedge funds with $5.0 trillion under management.
• Altogether some 2,661 registered advisers of private funds, including buyout firms and hedge fund managers, have nearly $9 trillion in assets under management.
• Buyout firm should make sure that they fill out the Form PF carefully. In its report the SEC said that in preparing for examinations of sponsors it checks to see whether answers provided in the Form PF are consistent with information provided to investors in offering documents, pitch books brochures, Form ADVs and related materials and documents.