In addition to filing Form ADV with the SEC when they
register with the Securities and Exchange Commission, private fund managers
will also need to start filing Form PF. I received a helpful reminder about
this last week form SEC's IARD system. (I'll need to get used to messages with
the subject line: "Firm 158137: An Important Message from the SECURITIES AND
SEC-registered investment advisers that manage one or
more private funds and, collectively with an adviser's related persons, had at
least $150 million in private fund assets under management will be required to
file Form PF in the future (beginning either after June 2012 or December 2012
depending upon each adviser's specific situation). Please see Form PF and its
general instructions for additional information ... and the SEC's recently
adopted rule .... Please note that advisers report private funds in Item 7.B on
Form ADV as well. Form PF will be filed in the future either through an online
form or through an XML submission process.
The amount of information required by Form PF is tiered,
depending on the type of fund. Hedge funds have the biggest burden.
Where do real estate funds fit into the reporting
In the glossary, a Real estate fund is
Any private fund that is not a hedge fund,
that does not provide investors with redemption rights in the ordinary course
and that invests primarily in real estate and real estate related assets.
That sounds right, but I still need to look at the
definition of Hedge fund:
Any private fund (other than a securitized asset fund):
(a) with respect to which one or more investment advisers (or related persons
of investment advisers) may be paid a performance fee or allocation calculated
by taking into account unrealized gains (other than a fee or allocation the
calculation of which may take into account unrealized gains solely for the
purpose of reducing such fee or allocation to reflect net unrealized losses);
(b) that may borrow an amount in excess of one-half of its net asset value
(including any committed capital) or may have gross notional exposure in
excess of twice its net asset value (including any committed capital);
(c) that may sell securities or other assets short or enter into similar
transactions (other than for the purpose of hedging currency exposure or
That definition talks about getting performance fees on
unrealized gains. That would be unusual for a real estate fund or private
The form also has more detailed requirements for large
private equity advisers. For purposes of Form PF, "private equity fund"is
any private fund that is not a hedge fund, liquidity
fund, real estate fund, securitized asset fund or venture
capital fund and does not provide investors with redemption rights in the
So a real estate fund is not a private equity
fund and not subject to the additional reporting requirements.
The last category that has enhanced reporting is
liquidity fund advisers:
Any private fund that seeks to generate income by
investing in a portfolio of short term obligations in order to maintain a
stable net asset value per unit or minimize principal volatility for investors.
That leaves real estate funds reporting the information
in Section 1a and Section 1b. That's still a great deal of information.
Being a member of the "all other advisers" category, the
filing is due with 120 days after the end of the fiscal year. Assuming calendar
year is my fiscal year, the first filing is due by April30, 2013.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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nice stuff about real estate funds.
Professional university level education in real estate is primarily focused at the graduate level. Focus in towards the commercial real estate sector, primarily real estate development or investment rather than residential real estate sales conducted by a Realtor. Thanks.