The Securities Exchange Commission is probing how private-equity firms report their internal net rate of return, according to a report by Reuters. Net returns deduct private-equity investors' fees from gross profits and private-equity fees are not standard. Fund investors have to pay fees to a firm while the firm and its managers called general partners invest money don't have to pay fees. Showing a general partner's investment can inflate the fund's average net performance figures.
Copyright © 2014 MarketWatch, Inc.