Compared to years past, the transition from 2020 to 2021 promises to be particularly stark and jarring. With the slow distribution of a coronavirus vaccine, the beginning of the Biden administration and the eventual appointment of a new SEC chair, various changes are coming that warrant the private funds industry’s attention. Ironically, as PE sponsors welcome a return to normalcy after a surreal year, they should also brace for the increased regulatory scrutiny that will come from the SEC under a Democratic administration. To help sponsors steel themselves for the road ahead in 2021, the Private Equity Law Report interviewed Schulte Roth & Zabel partners Marc E. Elovitz and Stephanie R. Breslow about issues to be aware of in the new year. This first article in a two-part series contains their forecast of the nature and focus of SEC examinations, as well as regulatory happenings likely to affect the PE industry. The second article
will identify certain trends in fund terms and practices that sponsors can expect to carry into the new year, along with compliance practices sponsors need to adopt in 2021. To reflect on PE expectations for 2020, see our two-part series: “SEC Examinations, Regulatory Developments and Compliance Measures to Adopt
” (Jan. 7, 2020); and “Fee Arrangements, Fund Terms and the Secondary Market
” (Jan. 14, 2020).