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Performance Track Record No-Action Letter Will Help Adviser M&A

The staff of the Division of Investment Management has granted no action relief to allow a merged subsidiary to continue to use its performance track record.  The SEC noted that the internal reorganization described would result in a newly-created division utilizing the same investment personnel and processes.  The applicant, which merged the former separate entity into another investment adviser subsidiary, distinguished the reorganization from the Great Lakes no action letter, where the SEC came to a different conclusion because the new investment committee had personnel changes.

OUR TAKE: This letter will help investment adviser roll-ups by private equity firms and other strategic buyers by allowing internal corporate structuring freedom without fear of losing performance track records.

https://www.sec.gov/divisions/investment/noaction/2018/southstatebank050818.htm