Easing the Stress of Special Purpose Vehicles and Funds of One

Finding the Right Admin Partner to Survive in the New Financial Landscape

Increasingly, institutional investors and family offices are making more and more direct investments. This has led to the formation of special purpose vehicles (SPVs). In addition, many families and ultra-high net worth individuals are organizing their own private funds, called funds of one. What’s more, major institutions often have literally hundreds of these vehicles. In addition, Dodd-Frank and last summer’s SEC directive have raised the bar on key compliance, administrative, accounting and tax issues. The new landscape has added complexity to administration, accounting and reporting, tax and regulatory compliance without the resources or expertise to deal with the associated administrative demands.

What makes these entities especially challenging is that they often fly under the radar, remaining dormant and unnoticed — until there’s a problem. Professionals say a special purpose vehicle is “quiet until it’s not.” In a given year, there might not be any transactions that take place because the events that give rise to payments have not been met. Other times, there may be a single transaction in a year or maybe a transaction quarterly. The specific activity, cash flows and filing requirements are typically dependent on the purpose of the investment and the investors, the jurisdictions and regulatory regimes involved, and the surrounding contracts.

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Marc L. Rinaldi, CPA
Partner-in-Charge,
Financial Services
(646) 449-6309 | mrinaldi@pkfod.com

Eric P. Gelb, CPA
Director of Business Development,
Financial Services
(914) 341-7049 | egelb@pkfod.com