Making predictions is a dangerous business, but the team at pfm does not shy away from danger. Here are some stories we think will take up some column inches this year.

GPs will wrestle with data privacy…

A law similar to the EU General Data Protection Regulation, which came into effect in May, will be implemented in California in 2020. The California law follows the same principles as GDPR in ensuring that consumers’ data are protected and that they have the right to access and know how their data are collected.

We’ll hear from CFOs and COOs on how they are preparing for the new rules. If there’s no office in California but portfolio companies do business in the state, does that necessitate complying with the law? Such issues need to be addressed this year.

… and get comfortable managing cyber-risk

Along with data privacy, cyber-risk management will be a top priority. Regulators like the Securities and Exchange Commission are asking firms during examinations what kinds of policies and procedures are in place to prevent cyber threats and whether there are incident response plans. “The minute you have a breach, then [the SEC] will come down on you,” one consultant said at the PFFC Forum in San Francisco in October. “That’s why it’s so critical to be prepared on the cyber side.”

The trend toward outsourcing will roll on

One fund administrator we quoted in 2018 cited recent studies indicating that the amount of outsourced solutions in the US could grow by 50 or 60 percent within the next five years. “[It’s] more cost-effective and time-saving, and frankly even safer for a lot of funds to outsource critical functions to experts – safer in the sense that it is comforting for investors to have a third party checking the fund’s work,” as one CFO told us in December.

A firm will get fined for using WhatsApp

In 2018, the SEC issued a risk alert regarding the use of electronic messaging on third-party services, which means they are now on the hunt for transgressions. It may be challenging for firms to monitor employees’ activities on social media, but the agency has sent a message that firms should devise ways to improve their systems, policies and procedures in monitoring electronic messaging services outside of work email.

We would like to wish our subscribers a happy and prosperous new year. We will revisit our predictions come the end of December 2019 and hold ourselves to account. Let us know your thoughts: dominic.d@peimedia.com