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    Mar. 6, 2025

CCO Hiring Process: Compensation Ranges and Key Attributes for the Role (Part One of Two)

As the SEC continues to focus on private funds and regulatory requirements proliferate, fund managers are attributing more value and importance to their respective compliance programs. Accordingly, demand for qualified CCO candidates has never been higher as managers scramble to fill the role or upgrade their existing compliance teams. There is a constantly evolving standard, however, as to the types of skills, experience and traits an individual needs to thrive as a CCO, as well as the amount of compensation managers need to offer to secure their services. This first article in a two-part series discusses current drivers and trends in the CCO market; the experience, skills and attributes firms are looking for in candidates; and the typical compensation ranges for CCOs based on a firm’s size and sophistication. The second article will examine the timeline for filling the CCO role, key stakeholders involved in the interview process and an array of sample questions that firms use to vet which candidate is best suited for the role. See “SEC Risk Alert Reflects Growing Concerns About and Focus on Private Funds” (Mar. 8, 2022); and “SEC Private Fund Statistics Report: Continued Growth in Private Funds and Private Fund Assets” (Apr. 7, 2020).

It’s Cool to Be In‑Kind: Tax and Non‑Tax Considerations of In‑Kind Distributions of Partnership Property

Private investment funds seeking to return capital to investors may want to consider in‑kind distributions, which are generally tax-free for U.S. federal income tax purposes. In addition, in‑kind distributions may make sense when the investment horizon extends beyond the term of a closed-end fund or when investors have divergent views as to whether to continue with an investment or desire liquidity. In those cases, the fund manager may move an asset in‑kind to a new continuation vehicle, offering the choice of liquidity to those investors seeking an exit or the opportunity to continue with the investment. In a guest article, Seward & Kissel partners Brett R. Cotler, David R. Mullé and Sonita M. Bennitt provide an overview of the tax and regulatory considerations when making in‑kind distributions, including new tax reporting forms, valuation considerations and Rule 144 concerns. For more from Cotler, see “Tax Court Ruling Is a Setback for Fund Managers Structured As Limited Partnerships” (Feb. 8, 2024).

SEC Penalizes Firms for AML‑Related Violations

On August 28, 2024, the Financial Crimes Enforcement Network (FinCEN) adopted final anti-money laundering (AML) rules for investment advisers, which take effect on January 1, 2026. A pair of SEC settlements offers insights into the types of issues advisers might face when the FinCEN final rules take effect. Although advisers are not yet required to have AML programs, those that do must ensure their AML processes align with their representations to investors about their AML programs. For example, the SEC fined an investment adviser that represented that it would confirm its investors’ identities and sources of funds but then failed to do so as to certain investors. Similarly, firms required to have AML programs must ensure they implement them effectively. In that regard, the SEC fined a broker-dealer for allegedly failing to follow its AML policies and procedures and maintain records regarding its customer due diligence activities. This article discusses both settlements, with commentary from Haynes and Boone partner Madelyn Calabrese. See our two-part series on FinCEN’s final AML rules: “Parsing FinCEN’s Final AML Rules” (Jan. 23, 2025); and “Understanding the Implications for Fund Managers” (Feb. 6, 2025).

ACC and EY Report Examines Growth Trajectory and Recent Trends in Private Credit

Private credit has become an established global asset class and continues to grow as it serves the needs of a broad range of borrowers across sectors, while delivering steady returns to investors. The asset class has shown resiliency in challenging environments and seems only to become more attractive, but the trend toward consolidation and other developments could change the dynamics that have spurred private credit’s growth to date. To provide data and insights into the private credit market, the Alternative Credit Council (ACC) collaborated with EY to publish its tenth annual research report, entitled “Financing the Economy” (Report). The Report is based on a survey conducted by ACC and EY of 53 private credit managers and investors, as well as one-on-one interviews with industry leaders. Respondents to the survey collectively manage more than $2 trillion in private credit assets and are located across the globe – primarily in the U.S. and Europe. This article summarizes the key findings and insights from the Report. See “Emerging Industry Trends Include Rise of Evergreen Structures, Tax Complications and Private Credit Funds” (Jan. 9, 2025); and “Trends and Key Drivers in PE and Private Credit Seeding Transactions” (Jul. 11, 2024).

SEC Charges Fund Manager With MNPI Failures Related to Consultant

On December 20, 2024, the SEC announced that it had brought charges against a private fund manager that invests heavily in distressed companies for alleged securities violations relating to its internal policies and procedures. In the SEC’s view, the manager’s compliance department should have been more proactive and more closely monitored the activities of a consultant and his use of material nonpublic information (MNPI) gleaned in the course of his work on creditors’ committees. However, it is important to note that the SEC did not actually charge the manager or consultant with any improper use of MNPI but with a failure to implement and enforce reasonably designed compliance policies and procedures to prevent such misuse. The manager has denied any wrongdoing, stating that it was “shocked” at the SEC’s characterization of its internal compliance culture. This article summarizes the case and presents key takeaways for fund managers seeking to avoid any potential complications around the use of MNPI. See “Inadequate MNPI Policies Cost CLO and Private Fund Adviser $1.8 Million” (Jan. 9, 2025).

Weil Welcomes Former Acting Director of the SEC’s Division of Enforcement

Weil has announced that Sanjay Wadhwa has joined the firm as a partner in its securities litigation and white collar defense, regulatory and investigations practices in New York. He most recently served as Acting Director of the SEC’s Division of Enforcement. See “Implications of Enforcement’s New Policy Requiring Admissions in Certain Settlements” (Feb. 15, 2022); as well as “Grading Gary Gensler: Examination Practices, Enforcement Efforts and Industry Guidance (Part One of Two)” (Feb. 6, 2025).

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Upcoming Webinar to Examine GP‑Led Restructurings

Please join the Private Equity Law Report on Thursday, March 12, 2020, at 11:00 a.m. EDT, for a complimentary webinar exploring secondary transactions led by GPs. To register for the webinar, click here.

Upcoming Webinar to Explore Best Practices for Alternative Data Use

Please join our sister product – the Hedge Fund Law Report – on Wednesday, January 15, 2020, at 11:00 a.m. EST for a complimentary webinar discussing issues relating to the use of alternative data by private fund managers. To register for the webinar, click here.

The PELR Will Resume Regular Publication in January

Please note that the Private Equity Law Report will not publish during these holiday weeks and will resume its normal weekly publication schedule during the week starting January 6, 2020.

Upcoming Fireside Chat With SEC Commissioner Hester M. Peirce 

Please join our sister product – the Hedge Fund Law Report – on Thursday, October 3, 2019, at 1:00 p.m. EDT for a complimentary webinar during which SEC Commissioner Hester M. Peirce will discuss topics of interest to private fund managers and answer attendees’ questions. To register for the webinar, click here.

Upcoming Webinar to Explore Effective Tabletop Exercises

Please join our sister products – the Hedge Fund Law Report and the Cybersecurity Law Report – on Tuesday, July 30, 2019, at 1:00 p.m. ET for a complimentary webinar discussing the strategies and tactics fund managers can employ to conduct an effective tabletop exercise. GCs and CCOs are encouraged to invite their CISOs and CTOs to join as well. To register for the webinar, click here.

PELR Webinar to Examine Issues and Trends in Impact Investing

Please join the Private Equity Law Report on Wednesday, June 12, 2019, at 2:00 p.m. EDT, for a complimentary webinar exploring impact investing. To register for the webinar, click here.

Webinar to Explore Best Practices for AML Compliance

Please join our sister product, the Hedge Fund Law Report, on Thursday, May 30, 2019, at 11:00 a.m. EDT, for a complimentary webinar discussing the key components of a robust anti-money laundering program. To register for the webinar, click here.

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