Sponsors of small cap PE funds are often specialists within their investment subsectors. Many sponsors even have multiple funds running concurrently, which can consume them with the daily management of the assets under management, periodic communications with investors, and capital raising activities for new sponsored funds.
The administrative functions at small cap PE fund managers can be stretched when it comes to keeping up with the changes in financial reporting and taxation while also meeting investor expectations for year-end financial reports and tax return k1s.
BNKJ has extensive experience serving the small cap PE investment fund industry. Our professionals who practice in this industry have years of knowledge and experience in helping investment managers and their staff to meet the needs and expectations of their fund investors. We are familiar with the many nuances this industry faces and we are members of the Public Company Accounting Oversight Board (PCAOB). Services include
- Financial statement audits or reviews implementing fair value accounting for investment assets and investment company reporting (ASC 820 and 946, respectively)
- SOC 1 and SOC 2 reporting on internal controls for investor user organizations and their auditors
- SEC ADV “surprise audits”
- Assistance with P&L allocations with complex capital structures, waterfall provisions and similar structures
- Managing multi-state tax reporting implications including evolving apportionment methods, state withholding requirements and composite return filings
- Working with investment managers who have tax-exempt investors and dealing with unrelated business taxable income (UBTI)
- Working with investment managers who have non-US investors, foreign withholding and using “blocker” structures