The SEC's private fund advisor reforms were approved on a 3-2 vote, and while modified and weakened to some degree according to exports who have spoken with GlobeSt.com, they still are, as the Wall Street Journal put it, "the biggest regulatory challenge in more than a decade to firms such as Blackstone, Apollo Global Management and Citadel." And to much smaller companies as well that are part of the estimated $25 trillion in gross assets being managed.

"Compared to the proposal, it's been watered down to make it more acceptable, to reduce pushback," says Ron Geffner, founding member of the executive committee at Sadis & Goldberg, as well as overseeing the financial service group and being a former SEC enforcement lawyer. "The three main things I think that will affect the industry are quarterly reporting, the preferential treatment rule, and the audit rule."

The challenge for fund managers of the audit rule will be to reduce complexity. "All registered investment advisors are required to audit any private deals they manage," Geffner says. The coming challenge is when within with special purpose vehicles that only invest in one asset. That could mean a lot of reporting. One approach, according to Geffner, would be to aggregate all the entities into an umbrella one and structure them as a portfolio, but then investors see all the assets "and have access to all the data that they historically didn't have."