Venable partner Tom Quinn and senior legislative advisor Jake Seher were identified in an October 21, 2009 Wall Street Journal story as representing a consortium of approximately 50 family investment funds that would like lawmakers to exempt their activities from the tighter controls on private investment groups that are part of the Obama administration's proposed overhaul of financial-services rules.
The proposed new rules would require private-equity funds and hedge funds to disclose more activities with the goal of providing regulators with more information so they can better monitor risks across the financial system.
The legislation would also impose those regulations on so-called single-family offices, the private investment accounts of the wealthiest U.S. families. According to a recent Wharton School study, there are approximately 1,000 such family accounts worldwide with $100 million or more in assets. Almost half of those have assets exceeding $1 billion. The families argue that their funds are aimed at maintaining wealth, not aggressive investment, and pose no systemic risk to the economy.
The family investment funds have never been subject to regulation. They have relied on the same exemption to the 1940 Investment Advisers Act that hedge funds and private-equity firms have claimed. New financial-services regulations proposed by Democrats would effectively end such exemptions.
The House Financial Services Committee next week is expected to begin debating a measure that would require managers of all sorts of private-investment funds to disclose more of their activities.