SEC Examining Carlyle, Apollo Fee Practices

The US regulator made “informal requests” for more information regarding the two private equity firms’ fees and expenses.

The US Securities and Exchange Commission (SEC) is conducting informal investigations into the fee practices of Carlyle Group and Apollo Global Management, according to regulatory filings by the firms.

Carlyle said the SEC had requested “additional information about our historical monitoring fee acceleration practices” in its February 10-K filing.

“We are cooperating fully with the SEC’s informal request,” the firm continued.

Apollo revealed in its November 10-Q filing that it had likewise been asked for additional information on “disclosure to limited partners of the acceleration of certain special fees.”

“The company is fully and voluntarily cooperating with the informal request,” Apollo said.

Spokespeople for both companies would not provide any additional comment.

Private equity firms Blackstone and KKR paid a combined $69 million in SEC settlements last year for charges related to improper fee disclosures.

Blackstone’s charges came a year after the SEC “informally requested additional information about [its] historical monitoring fee termination practices” in October 2014, the firm said in its most recent 10-Q filing.

SEC Chair Mary Jo White said in October that private equity fee and expense practices continue to be one of the regulator’s top concerns.

“Investors, regardless of their sophistication level, must have, and deserve to have, the information necessary about their adviser and funds to make an informed investment decision,” she said.

Related: SEC Head Talks Hedge Fund, Private Equity Regulation; Blackstone Pays $39M for Fee Disclosure Failings; KKR Fined $30M for Breach of Fiduciary Duty