Nearly a quarter of the staff in the Securities and Exchange Commission's division overseeing hedge funds, private credit firms, mutual funds and many investment products, left the agency last year, according to a new report.
The SEC's Division of Investment Management lost 24% of its staff during fiscal year 2025, with the division identifying "lost expertise on rulemaking," the US Government Accountability Office said in a report released Friday.
The staff departures come as funds riding the private credit boom are now facing scrutiny and skittishness among investors. Some of the biggest asset managers, including Apollo Global Management Inc. and Ares Management Corp., have recently blocked investors from getting some of the money they wanted out of their funds.
While the Division of Investment Management saw the highest percentage of departures, the SEC lost about 18% of its overall personnel during that period. Some of those departures were tied to broader federal workforce changes wrought by the Department of Government Efficiency, an initiative of billionaire Elon Musk.
The GAO said that departing staff had "either unique knowledge or specific subject matter expertise" and the workforce changes could "pose risks to the agency's ability to fulfill its mission." A total of 871 employees left the roughly 5,000-person agency, of which 599 accepted voluntary departure programs, the GAO said.
An agency spokesperson said the SEC is equipped with the staff necessary to fulfill the agency's mission, adding Chairman Paul Atkins is working to ensure any hiring needs are addressed in a "timely manner."
"The voluntary staff departures have created opportunities for new talent to join the dedicated public servants that work daily to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets," the spokesperson said.
The GAO said another 42 people left the SEC in fiscal 2026 after the agency offered another round of voluntary early retirements and incentive payments.
Credit: Diego Radzinschi/ALM
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