Private Fund Investor Due Diligence – Evidence from 1995 to 2015

60 Pages Posted: 20 Jul 2016 Last revised: 22 Dec 2016

See all articles by Wulf A. Kaal

Wulf A. Kaal

University of St. Thomas, Minnesota - School of Law

Date Written: July 19, 2016

Abstract

The importance of private fund investor due diligence in the investment allocation process, in capital formation, and in private fund litigation has reached unprecedented levels and is further increasing. To provide the industry with data, data trend analyses, and guidance on applicable legal standards, the author examines two datasets: (1) private investment fund advisers’ SEC Form ADV II filings from 2007 to 2014 (N=100392), and (2) the publicly available litigation record pertaining to private fund investor due diligence from 1995 to 2015 (N=572). After highlighting important changes in the quality and quantity of private fund investor due diligence in SEC Form ADV Part II, the author evaluates the corresponding litigation record and analyzes expert guidance on applicable best practices.

Keywords: Private Investment Fund, Investor, Investor Due Diligence, SEC Form ADV Part II, Disclosures, Case Law, Legal Standards, Expert Testimony, Time Series

JEL Classification: G23, G24, G28, K22

Suggested Citation

Kaal, Wulf A., Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (July 19, 2016). Review of Banking and Financial Law, 2016; U of St. Thomas (Minnesota) Legal Studies Research Paper No. 16-15. Available at SSRN: https://ssrn.com/abstract=2811718 or http://dx.doi.org/10.2139/ssrn.2811718

Wulf A. Kaal (Contact Author)

University of St. Thomas, Minnesota - School of Law ( email )

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

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