Investor Relations & Reporting Flashcards
7 cards from real CFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Investor Relations & Reporting flashcards as text
Form PF filed with the SEC is primarily designed to help regulators monitor what type of systemic risk?
Answer: Systemic risk posed by large private fund advisers
Form PF was created by Dodd-Frank to give regulators data on large private funds to identify and monitor systemic risks.
A fund's investor letter discloses that the GP has changed the valuation policy for Level 3 assets from cost to third-party appraisal. Under ASC 820, this change would most likely be disclosed as:
Answer: A change in valuation technique requiring disclosure of the reason and impact
ASC 820 requires disclosure when a valuation technique changes, including the reason for the change and its quantitative impact.
Which reporting metric is most relevant for evaluating the capital efficiency of a private equity fund from an LP's perspective?
Answer: Total Value to Paid-In (TVPI)
TVPI (also called the investment multiple) measures total value generated — distributions plus remaining NAV — per dollar of invested capital.
A large pension fund LP asks the fund manager for a look-through report on underlying portfolio company exposures. This request is primarily driven by what concern?
Answer: Concentration risk and portfolio-level asset allocation compliance
Look-through reporting lets LPs aggregate exposures across multiple fund managers to identify unintended concentration risks.
Under ILPA (Institutional Limited Partners Association) reporting standards, fee and expense reporting should be presented:
Answer: In a standardized template distinguishing management fees, fund expenses, and portfolio monitoring fees
ILPA's fee reporting template breaks out management fees, fund-level expenses, and portfolio monitoring fees to improve LP transparency.
An investor relations team is preparing the fund's quarterly letter. Which content element is considered a regulatory 'red flag' if included without proper disclosure?
Answer: Selected performance figures that exclude the fund's worst-performing positions
Cherry-picking performance figures by excluding poor performers constitutes misleading advertising under the Investment Advisers Act.
The Distribution Waterfall in a private equity fund defines the sequence in which cash flows are distributed. Which ordering is typical in a U.S. 'European waterfall' structure?
Answer: Return of capital → Preferred return → Catch-up → Carried interest
In a European waterfall, LPs first receive full return of capital, then the preferred return, then the GP catch-up, then carried interest splits.