Steven Richman Discusses Synthetic Distributions in Private Equity Law Report

Private Equity Law Report quoted Seyfarth Institutional Investors practice chair Steven Richman in its article, “Ways That DPI Calculations Can Be Distorted to Mislead LPs (Part Two of Two),” on July 10. Richman discussed a situation that distorts distri­butions to paid-in capital (DPI) and has been receiving increased attention from both investors and fund managers: the use of synthetic distributions.

“When people think of DPI, what they are generally thinking is: ‘We have invested our money. The manager has gone out and bought a company or made an investment in one, has nurtured it, has realized the investment and now the manager is making a distribution pur­suant to that business plan.’”

The full article is available here.