US SEC Plans Investigation of Private Equity Use in Retirement Accounts

Recent regulatory developments are significantly impacting private equity and institutional investing, with a growing emphasis on fiduciary duties and investor protections. In the U.S., the Department of Labor's Retirement Security Rule expands the fiduciary standard, requiring personalized investment advice to meet strict impartiality and disclosure criteria, while courts increasingly recognize ESG factors as relevant to financial outcomes when evidence-based. The U.S. SEC's Office of the Investor Advocate is scrutinizing the expansion of private equity and alternative investments in retirement accounts, highlighting risks such as limited disclosures, illiquidity, and potential fraud, and evaluating compliance with fiduciary responsibilities under ERISA. Meanwhile, Nigeria has introduced new private equity regulations that raise the threshold for SEC registration, mandate good faith valuations, and increase concentration limits, reinforcing fiduciary duties for fund managers. Private equity firms have expanded their footprint in the life and annuities insurance sectors, leveraging premiums to support portfolio companies and private credit, a strategy that has drawn regulatory attention due to associated risks. Additionally, private equity-backed companies face complex insurance and compliance challenges, necessitating tailored coverage in areas like directors and officers liability, cyber liability, employment practices, and M&A-specific risks to meet investor and regulatory expectations.