Legal Business

Tied up and tied down – a peculiar way to police the private funds market

Simpson Thacher’s Jason Glover argues a confused regulatory shake-up will result in higher costs and less choice for investors

The financial crisis ushered a wave of new regulations aimed at mitigating systemic risk to the financial system. While no-one has been able to rationally point a finger at private funds as a cause of the crisis, the industry has nonetheless seen a dramatic rise in the level of regulation and scrutiny. As legal and compliance costs soar, one is hard-pressed to find a private fund manager or – perhaps more importantly – an investor welcoming these changes.