Inflation is at record highs. Americans are paying more for gas, groceries, and basic goods than at any other time in recent history. What the Federal Reserve once called “transitory” unfortunately seems to be anything but.
So why is it that the U.S. Securities and Exchange Commission (SEC) is pursuing an aggressive, overreaching regulatory agenda that will only result in less financial stability for Americans? SEC Chairman Gary Gensler’s rationale does not track with the reality of working-class families.
The proposals that Chairman Gensler’s SEC is attempting to railroad through will take a significant toll on university endowments, charitable nonprofits, and pension funds. This is because these critical institutions rely on active managers targeted by these rules — including hedge funds, private equity, and venture capital — to grow their portfolios. By imposing onerous regulations and unnecessary red tape, the SEC will disrupt the vital relationship between active managers and these institutions.
When an institution can grow its portfolio, more capital is available to support its beneficiaries, such as retirees, charitable recipients, and students. These beneficiaries are often individuals who hail from America’s proud Hispanic communities —individuals who work hard in critical industries to provide for their loved ones and create new opportunities for their families. If the SEC’s aggressive overreach goes unchecked, underserved communities across the country will foot the bill.
One of the most compelling examples of Americans’ vital relationship with private funds is through university endowments, which help make college attainable for minority students and others who might lack the ability to pay full tuition rates. The cost of a college education is rising every year. Yet, a degree remains necessary for those who want to earn a better salary or create more opportunities for themselves.
It appears Chairman Gensler doesn’t understand the importance of scholarships made possible by hedge fund investments. If he did, the SEC would not be pursuing regulations that would compromise the ability of college and university endowments to grow. Simply put, the SEC’s regulatory agenda will make college less accessible, taking educational opportunities away from many Americans.
University endowments, nonprofits, and pension plans entrust trillions of dollars to private funds. These numbers are more than tallies on a spreadsheet; it’s the retirement security of hard-working first responders, access to affordable healthcare at nonprofit medical centers, and the hopes and dreams of aspiring first-generation college students.
With inflation showing no signs of slowing down, the benefits of Hedge funds, private equity, and venture capital are even more critical. Yet, the SEC is threatening to fundamentally disrupt well-functioning financial relationships that benefit millions of Americans, including many from underserved communities. The agency’s regulatory overreach is dangerous and must be stopped.
