PE/VC operates inside a thicket of US and global regulations. Most of the time these are background. Occasionally they are everything — a registration deadline missed, a CFIUS filing botched, a Rule 506 marketing rule breached, and the consequences are existential.
The Investment Advisers Act
GPs managing more than $150M in private fund assets must register with the SEC as Investment Advisers. Registration imposes obligations: a Form ADV public disclosure document, compliance policies and procedures, an annual compliance officer review, and book-and-records requirements. The 2023 Private Fund Adviser Rules (since partially vacated by the Fifth Circuit, but with much of the LP-protection content adopted in practice anyway) added: standardised quarterly statements, mandatory independent audit, required side-letter disclosure, and restrictions on certain LP-disadvantaging practices.
Rule 506 exemptions
PE funds raise capital under Regulation D's Rule 506 exemption from securities registration. 506(b) permits private offering with no general solicitation. 506(c) permits general solicitation but requires verification that all investors are accredited. Both require LPs to be qualified — typically accredited investors (income, net-worth, or institutional thresholds) and, for $5M+ fund-level pools, qualified purchasers under Section 3(c)(7) of the Investment Company Act.
ERISA and CFIUS
ERISA applies if 25% or more of fund commitments come from US employee-benefit plans. ERISA-covered plan assets impose fiduciary duties on the GP that go beyond standard partnership duties. Most US PE funds either stay below the 25% threshold (avoiding ERISA) or operate as 'Venture Capital Operating Companies' (an ERISA exemption). CFIUS (Committee on Foreign Investment in the United States) reviews foreign investment in US businesses with national-security implications. The 2018 FIRRMA expansion broadened CFIUS jurisdiction to more sectors and more investor types; non-US LPs in US PE funds are now routinely subject to CFIUS analysis on individual deals.
AIFMD and the EU regime
The EU's Alternative Investment Fund Managers Directive (AIFMD) regulates fund managers with European investors or assets. AIFMD requires authorisation, capital adequacy, depository requirements, and detailed reporting. For PE managers, the practical operational requirement is the private placement regime (national private placement under each member-state's rules) or full AIFMD passport.