Davis Polk partner Michael Hong was quoted in a Financial Times article discussing the effects of the SEC’s new rules on the private fund industry. The article notes that private equity, venture capital and hedge fund groups are preparing to spend billions of dollars on compliance and legal advice to respond to the sweeping regulatory changes.

“A lot of smaller managers already spend a large portion of their operating budgets on compliance,” Michael said. “This will increase barriers to entry.”

Private funds prepare to spend billions on compliance after SEC rule,” Financial Times (September 13, 2023)