A Private Equity Manager Dilemma

Now that the SEC has proposed a rule mandating that investment advisers develop business continuity/ transition plans, how does this impact private capital funds?   In thinking about just the transition part of this new rule, which also requires the plan to be tested for adequacy, accuracy and effectiveness, there does not appear to be a clear application to advisers who manage only private capital funds.   

Of all our private capital fund clients and the private funds I have worked with throughout the years, all generally clearly describe key man events.   For those who give back investors’ money upon the sale of assets and close up shop when something happens to the key person responsible for the firm’s existence, there is no transition plan.   This begs the question, are private fund advisers expected to spend time to draw up a document to describe this event, in which case would they truly be creating a plan in compliance with the rule?   Perhaps there should be a carve in the final rule out for firms with similar key man provisions, or is there an expectation to create a plan?