CFM Investor Relations & Reporting 3

Question 1

Form PF filed with the SEC is primarily designed to help regulators monitor what type of systemic risk?

Accepted Answer

Systemic risk posed by large private fund advisers

Answer

Form PF was created by Dodd-Frank to give regulators data on large private funds to identify and monitor systemic risks.

Question 2

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:

Accepted Answer

A change in valuation technique requiring disclosure of the reason and impact

Answer

ASC 820 requires disclosure when a valuation technique changes, including the reason for the change and its quantitative impact.

Question 3

Which reporting metric is most relevant for evaluating the capital efficiency of a private equity fund from an LP's perspective?

Accepted Answer

Total Value to Paid-In (TVPI)

Answer

TVPI (also called the investment multiple) measures total value generated — distributions plus remaining NAV — per dollar of invested capital.

Question 4

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?

Accepted Answer

Concentration risk and portfolio-level asset allocation compliance

Answer

Look-through reporting lets LPs aggregate exposures across multiple fund managers to identify unintended concentration risks.

Question 5

Under ILPA (Institutional Limited Partners Association) reporting standards, fee and expense reporting should be presented:

Accepted Answer

In a standardized template distinguishing management fees, fund expenses, and portfolio monitoring fees

Answer

ILPA's fee reporting template breaks out management fees, fund-level expenses, and portfolio monitoring fees to improve LP transparency.

(CFM) Certified Fund Manager Practice Test

(CFM) Certified Fund Manager Practice Test

CFM Investor Relations & Reporting 3