SEC Proposes New Private Equity Fee Transparency Rules for 2026

The proposed rule, formally titled "Enhanced Private Fund Disclosure Requirements," would mandate that PE managers with more than $150 million in regulatory assets provide standardized quarterly reports detailing management fees, performance allocations, transaction fees, monitoring fees, and all expenses charged to fund vehicles.

Key Provisions

• Quarterly fee and expense reporting using a standardized template within 45 days of quarter-end
• Annual disclosure of portfolio company-level fee offsets and rebates
• Mandatory disclosure of all side letter arrangements that create preferential economics
• Enhanced GP clawback calculations with independent verification

SEC Chair Gary Gensler characterized the proposal as a natural extension of the 2023 Private Fund Adviser rules. "Limited partners deserve clear, comparable information about what they're paying and what they're getting," he stated during the announcement.

Industry Response

The American Investment Council, the industry's primary lobby group, expressed concern about compliance costs, estimating that mid-sized firms could face $2-4 million in annual implementation expenses. The AIC argued the existing ILPA reporting templates already provide adequate transparency.

However, several large pension systems including CalPERS and the New York State Common Retirement Fund have expressed support. CalPERS CIO Nicole Musicco noted that standardized disclosure would "significantly improve our ability to compare manager economics across our $55 billion PE portfolio."

The comment period runs 90 days, with a final rule expected by Q4 2026. If adopted, compliance would be required beginning January 2028.