Private equity’s new sheriff: SEC names co-head of private funds unit

The SEC is exploring potential rulemaking around GPs’ disclosure of fees, expenses and conflicts, the chairman said last month.

Amid an exploration of potential stricter private equity disclosure rules, the US Securities and Exchange Commission named Matthew Harris as co-head of its private funds unit, which performs regulatory examinations of private equity firms.

Chicago-based Harris is moving into the role vacated earlier this year by Igor Rozenblit, who left to start his own consultancy called Iron Road Partners. The other co-head of the unit is Jennifer Duggins, who joined the commission in 2015 from KPMG.

“I’ve known Matt for a decade and we’ve worked together for that decade. He was one of the original members of the private funds unit, he understands private funds and examinations as well as anyone at the commission,” Rozenblit said. “He’s a very fair and balanced person.”

The SEC’s private funds unit, within the commission’s division of examinations (formerly the office of compliance inspections and examinations), has become the nerve-centre of the SEC’s regulatory regime of the private equity industry.

Private equity, which long enjoyed light regulatory scrutiny compared with public markets, fell under stricter government control through the 2010 Dodd-Frank financial reform act. The act required private equity firms with $150 million and more of assets to register as investment advisers. This forced firms into compliance with the Investment Advisers Act, including opening their books periodically to SEC examinations.

The private funds unit was formed in 2014 and co-led at the time by Rozenblit and Marc Wyatt.

Harris joined the SEC in 2002, according to his LinkedIn profile, which has been updated with his new role. He joined the private funds unit in 2016 and was named assistant director and co-head of the unit this month, his profile said.

The SEC is exploring potential rulemaking around GPs’ disclosure of fees, expenses and conflicts, commission chairman Gary Gensler said last month in testimony before the Senate Committee on Banking, Housing and Urban Affairs.

“I believe we can enhance disclosures in this area, better enabling pensions and others investing in these private funds to get the information they need to make investment decisions,” Gensler said, according to a transcript of his testimony.

“Ultimately, every pension fund investing in these private funds would benefit if there were greater transparency and competition in the space,” Gensler said in the testimony. The committee is led by private equity critic Senator Sherrod Brown.

– This report was originally published on affiliate title Buyouts.