United States: Private Equity Sunshine Act (SB 1319)

By: Sasha Burstein, Ami R. Jani, Andrew J. Feucht III, Mark T. Heine, Daniel F.C. Crowley, Karishma S. Page, J. Matthew Mangan, and Ruth E. Delaney

California legislators are advancing the proposed Private Equity Sunshine Act (SB 1319) amending the California Public Records Act to require expanded disclosure by California public investment funds, including state and local pension systems, regarding their alternative investments. The bill would affect both public pension investors and fund managers with California public pension plans as investors.

Key Changes

Expansion of Existing Disclosure Requirements

• General partner and ownership identities: In addition to current requirements to disclose fund name, address, and vintage year, the bill would require disclosure of each general partner or manager and any person holding a direct or indirect interest in such entities.
• Total commitment and contributions: Beyond disclosing a public investment fund’s own commitments and contributions, the bill would require disclosure of total commitments and total cash contributions from all investors in the investment vehicle.
• Benchmarking: The bill would require that the public market index used for performance comparison be selected at the time of commitment, preventing retrospective benchmark selection.

New Disclosure Requirements

• Extended term funds: For investment vehicles operating beyond their stated term, the bill would require disclosure of the basis for continued operation, current asset values, and annual management fees, carried interest, and other expenses.
• Continuation fund transactions: The bill would require disclosure of continuation funds, asset rollovers, transfers, or similar transactions, including financial terms, fees, and valuations.
• Debt investments: For vehicles with debt exposure, disclosure would include the number and aggregate value of loans marked below 75% of face value (if originated) or cost (if acquired), along with third-party rating agencies engaged.

Legislative Status

Introduced on 20 February 2026 by Senators Dave Cortese and Maria Elena Durazo, and amended on 25 March 2026 and 15 April 2026, SB 1319 is supported by State Treasurer Fiona Ma and several labor organizations. The bill has passed the Senate Judiciary Committee and the Labor, Public Employment and Retirement Committee and is expected to proceed to the Senate Appropriations Committee.

Next Steps

Further amendments remain possible as the bill advances. We are actively monitoring developments and engaging with industry participants and stakeholders, and will provide updates as the proposal evolves.