E61: SPECIAL POD! New SEC Private Fund Advisors Rule – PE/VC Perspectives & Highlights | Clint Sorenson, Nick Fusco, Aaron Dillon

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01:13 | Enhanced performance reporting requirements for VC/PE/RE funds
- Private funds are required to deliver a fee table and performance reporting similar to mutual funds/ETFs, some metrics are difference for VC/PE/RE funds
- A standardized approach to performance reporting will lead to a renewed focus on marking assets to market prices
- Late stage pre-IPO positions should use an ApeVue-like product that sources real world prices from 20+ institutional brokers

06:16 | 3rd party valuations on advisor-led secondary transactions
- Advisor-led secondary transactions require a 3rd party valuation on the asset being traded
- LP-led secondary transactions are out of scope
- Using a 3rd party pricing source or model valuation mitigates pricing risk when self-dealing; e.g. one AG Dillon Fund is buying LP interests from another AG Dillon Fund both with AG Dillon as general partner

14:29 | No more side letters?!
- Advisors running private funds are now required to disclose economic side letter terms to all investors
- Transparency will most likely push advisors to standardization, like mutual fund sales load breakpoints
- Many GPs will simply not allow 0/0 SPVs going forward pushing for buyers and sellers to find a 0/0 solution on their own