Compliance and the Preqin Investor Network – PIN

Preqin Investor Network (PIN) is designed as an information service for professional investors, and to facilitate communications and information exchange between professional Investors and Fund Managers in the alternative assets space, covering private equity, venture capital, private debt, hedge funds, real estate, infrastructure, and natural resources.

Investors and Fund Managers using PIN do not undertake any form of general advertising or solicitation and do not make a public offering of securities. Only accredited investors (as defined by the SEC, and the equivalent in other jurisdictions) are able to access PIN. Two kinds of information are available to Investors through PIN:

  1. Preqin Data: this data is made available by Preqin to all PIN users, and is derived from Preqin's industry-leading databases, based primarily upon sources in the public domain. This data is provided for information purposes, and does not constitute general advertising, solicitation or a public offer of securities, and as such is not a regulated activity - not for Preqin providing the data on PIN; nor for the Investors accessing the information; nor for the Fund Managers for whose funds information appears on PIN;
  2. Confidential Fund Manager Data: in addition to the Preqin data above, Investors can request access to Confidential Fund Documentation direct from the Fund Manager (PPM, presentations, due diligence materials, etc). The process for requesting and granting access to this documentation is clear and straightforward:
    1. Having reviewed the Preqin Data, an Investor can request Confidential Fund Documentation directly from the Fund Manager simply by clicking the 'Request Confidential Fund Documentation' button;
    2. This sends a message to the Fund Manager which identifies the Investor, together with basic information about them, from their registration on PIN;
    3. It is then up to the Fund Manager to review, confirm and approve the Investor as an appropriate person to receive the Confidential Fund Documentation - in exactly the same way as when the Investor approaches / is approached by the Fund Manager through any other means (meeting, telephone, conference, referral, etc);
    4. Once the Fund Manager has approved the Investor, the Confidential Fund Documentation is made available to the Investor in various ways:
      1. The Investor has a hyperlink on his PIN account to the Fund Manager's virtual data room (VDR) - with security of access controlled by the Fund Manager via password;
      2. The Fund Manager can send the information off-line by email / hard copy / meeting / etc.;
      3. Key Fund Metrics are available on PIN only to Investors who have been approved by the Fund Manager - making the Fund more visible to these Investors and helping them make their detailed assessments of the Fund.

The compliance rules that apply to Fund Managers in respect of Investors approaching them via PIN are exactly the same as those applying to the Fund Manager in respect of Investors approaching them in any other manner – by telephone, face-to-face meetings, at conferences, by referral, etc.

An LP connecting with a GP via PIN is regarded by regulators as no different to them connecting via other online networks such as LinkedIn. And a GP allowing access to Confidential Fund Documentation on PIN is regarded as the same as a GP sending such information to an LP via email or providing access to an online data room. In each case the GP must take steps in accordance with their own compliance procedures to ensure that the LP is an accredited investor, if and when the relationship turns into a prospective investment by the LP into a fund managed by the GP.

The security measures on the site meet the requirements outlined by the SEC in the Lamp Technologies No-Action letter (May 29, 1998, SEC Ref. No. 98-123, Lamp Technologies, Inc., File No. 132-3) and subsequent follow-up letters:

  1. The website is password protected;
  2. Access is available only to accredited investors who must answer a questionnaire;
  3. Accredited investors agree not to subscribe to any funds profiled on the site within 30 days of becoming a member, unless they already have a relationship with the fund manager and/or have previously started the investment process; and
  4. Fund managers agree not to permit any investors to subscribe to their fund(s) in less than 30 days if the first connection between a member of their firm and that investor was made via PIN

Preqin and PIN do not provide any placement services and do not act as a broker-dealer, nor receive any transaction or success-related payments from any member or fund manager of any fund listed on PIN.

© Preqin Ltd. September 2018