Are you ready for Form PF?
Hedge fund executives have had plenty of time to prepare for the once dreaded new filing. Their preparatory efforts will pay off soon, as the form becomes a regulatory reality. The deadline is August 29 for the largest funds.
Bloomberg Businessweek quotes one executive about it, who says that, "Every year for many years, August was the month everybody went to the beach. There are a shocking number of people sitting in the office this month, plugging away at their homework."
My sense is that this is hyperbolic to some degree. The compliance people have been plugging away at this for a while now. The requirement didn't exactly creep up on anyone. The industry has long since seemed resigned to not only Form PF but the new Form ADV Part 2 that preceded it.
The big uncertainty about Form PF is what it will lead to. Giving information to regulators confidentially is one thing, but is it inevitable that limited partners will start asking for a look behind the once think hedge fund curtain? As long as the fund is posting strong gains, it will not likely be a concern, but at some point investors will be curious for whatever reason.
Like it or not, however, this is the new reality in the industry. Transparency with investors is necessary. More funds and limited partners may try to negotiate the issue in more detail at the point of investment, laying out ground rules about what the fund will reveal and what it won't.
- here's the article