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Develop and manage a private equity compliance program

Compliance has become one of the fastest-growing areas in the private equity (PE) space. Mirroring trends from the hedge fund industry, recent surveys indicate that PE managers rank compliance as the single most challenging aspect of their business. Reports also indicate that PE compliance spending has rapidly outpaced other PE operating costs with recent estimates indicating that individual PE funds on average spend at least 15 - 20% of their operating budgets on this area. General Partners (GPs) have also significantly ramped up the hiring of private equity compliance related roles.

Private Equity Compliance provides current and practical guidance on key private equity (PE) compliance challenges and trends. Packed with detailed, practical guidance on developing and managing a private equity compliance program, it offers up-to-date case studies and an analysis of critical regulatory enforcement actions on private equity funds in areas including conflict of interest, fees, expenses, LP fun raising disclosures, and valuations.

Provides real-world compliance guidance

Offers information that is tailored to the current compliance practices employed by GPs in the private equity industry.

Provides guidance on managing the compliance risks associated with cybersecurity and information technology risk

Serves as a PE-focused complement to the author´s previous book, Hedge Fund Compliance

If you´re a private equity investor or compliance officer looking for trusted guidance on analyzing conflicts, fees, and risks, this is one reference you can´t be without.

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Preface ix

CHAPTER 1 Introduction to Private Equity Compliance 1

CHAPTER 2 Compliance Obligations of General Partners 15

CHAPTER 3 Limited Partner Advisory Committees and Other Boards 25

CHAPTER 4 Valuation Compliance 41

CHAPTER 5 Conflicts of Interest 53

CHAPTER 6 Fees and Expenses - Compliance Considerations 73

CHAPTER 7 Private Equity Compliance Technology, Business Continuity, and Cybersecurity 107

CHAPTER 8 Understanding Private Equity Compliance Documentation 121

CHAPTER 9 Compliance Training, Surveillance, and Testing for Private Equity Firms 137

CHAPTER 10 Limited Partner Analysis of Private Equity Compliance Functions 151

CHAPTER 11 Interviews with Private Equity Compliance Professionals 167

CHAPTER 12 Compliance Trends and Future Developments 193

About the Author 205

Index 207

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JASON A. SCHARFMAN is the Managing Partner of Corgentum Consulting, a specialist consulting firm which performs operational due diligence reviews and background investigations of fund managers, including hedge funds and private equity funds. Mr. Scharfman has provided training to financial regulators, consulted with government entities on financial regulation, developed compliance functions, and analyzed private equity compliance structures across the globe. He is the author of Hedge Fund Compliance from Wiley.

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