Is your business ready for the new Form PF requirements?

27 May 2025 - The private funds industry stands at a pivotal crossroads following the SEC and CFTC's landmark amendments to Form PF.

These changes represent more than just enhanced reporting requirements – they signal a fundamental shift in how regulators approach systemic risk monitoring in private markets. As an industry, we can view this transformation through both a strategic and operational lens. By transitioning from quarterly to monthly reporting and implementing more granular disclosure requirements, regulators are clearly signaling their intent to maintain closer oversight of private markets.

There are several key changes taking effect in 2025 which managers will now need to focus on to satisfy new reporting requirements, including:

• Enhanced strategy reporting via detailed portfolio and performance metrics
• Expanded counterparty disclosure requirements
• Increased portfolio company transparency for private equity advisers
• More comprehensive liquidity reporting frameworks

While the focus on reporting by the regulator reflects private markets' growing influence in the global financial ecosystem, it also creates a new operational paradigm for fund managers.

Challenges or opportunities?

While the immediate concern for managers will be on meeting the challenges caused by the above requirements, these changes also present significant opportunities for strategic differentiation. For example, when it comes to reporting, operational excellence could give managers the edge over competitors who fail to deliver as detailed reporting frameworks in the same reduced timeframes.

As strategies invest in more diverse asset classes to generate returns for investors, complexity is also on the rise. It will be those that can seamlessly manage enhanced reporting on a wider range of assets, while maintaining operational efficiency, which are likely to gain significant competitive advantages.

Technology is also set to become a key battleground. The mandate for daily P&L tracking and granular reporting necessitates investment in technology, but while this can be seen as an additional headache by some, it also presents an opportunity to modernize systems and leverage data analytics for improved decision-making. Progressive firms are therefore viewing technology upgrades not as new costs, but as investments in operational excellence that drive long-term value.

The incoming requirements for trigger events and daily performance monitoring are also pushing firms toward more dynamic risk management tools. Again, this shift can lead to more resilient portfolio management practices and better risk awareness, giving managers more strings to their bows.

Industry-level transformation

The amendments create multiple pathways for business enhancement, most notably around investor transparency, operational efficiency, risk management capabilities and data-driven decision-making.

At Citco, we believe there will be a deeper transformation across the industry as a result of Form PF. Success in this new environment requires more than technical compliance – it demands a cultural shift toward data-driven operations, with managers viewing regulatory requirements as opportunities to do things better than before. This change will be supported by service providers who understand both technical necessities and the strategic implications of new ways of working.

The winners in this new world will be those who seamlessly integrate incoming requirements into their operational DNA, while maintaining their focus on core investment activities. Whether they do this alone or with a third-party provider, managers at the cutting edge of the industry will be approaching technology upgrades as strategic investments that allow them to develop robust data management capabilities, build scalable operational infrastructure and – ultimately – foster a culture of continuous improvement.

Looking ahead

The Form PF amendments represent more than regulatory change – they are catalyzing a transformation in the alternative investment industry that was already taking place.

Forward-thinking managers will almost certainly use this as an opportunity to build stronger, more resilient organizations that are better positioned for future growth, with those who embrace this transformation - while maintaining focus on delivering value to investors - emerging as industry leaders. While challenging, this sets the stage for a more transparent, efficient, and resilient private funds industry. The question for managers isn't whether to adapt, but how to leverage these changes to provide a lasting competitive advantage.