Form PF

The AIC urges the SEC to reform Form PF to reflect the fact that private equity investment advisers, funds and their portfolio companies pose no systemic risk. This will reduce unnecessary reporting burdens on private equity without compromising investor protections.

Private equity fund sponsors should be relieved from the burden of responding to Section 4 of Form PF, which requires detailed reporting on portfolio companies. Private equity funds and sponsors are not systemically important, nor is leverage at the portfolio company level a means of assessing systemic risk. Therefore, there is no reason to require private equity fund sponsors to collect and provide detailed and burdensome information on their portfolio companies as required by Section 4. Indeed, the burdens associated with the Section 4 data collection process can be significant. In addition, the focus on leverage at the portfolio company level as a means of assessing systemic risk is misplaced. Information concerning portfolio company leverage is irrelevant to the assessment of whether a private equity fund sponsor might pose systemic risks, as the leverage of a private equity fund portfolio company is not cross-collateralized or guaranteed by either the fund or its other portfolio companies. There is nothing unique about a lender’s loans to private equity portfolio companies that would make them more risky than a wide range of other types of loans made by the lender to other companies owned by public shareholders, public companies or other institutional investors.