The private equity fund world is a buzz about the treatment of fees and expenses after comments made by Andrew Bowden, the director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations, at the Private Equity Fund Compliance Forum 2014 on May 6th. Mr. Bowden shared insights that the Office of Compliance Inspections and Examinations has learned from its Presence Exam Initiative, an initiative designed to establish a presence with the private equity industry following the call for increased regulatory oversight. Since these exams began almost two years ago, the Securities and Exchange Commission (the “SEC”) has found deficiencies in the treatment of fees and expenses more than 50% of the time. The SEC points to hidden fees and expense-shifting as troubling practices uncovered as a result of the examinations. The remarks suggest that most deficiencies are a result of an adviser’s failure to provide adequate disclosure or to adhere to the terms of it’s limited partnership agreement. The spotlight on fees and expenses has caused both private equity fund advisers and their investors to focus on the area—an impact on fund terms is likely to follow.