Building and Running a Compliance Program in Private Markets
Julian R. Sterling
These are the companion files of The Private Fund Compliance Officer by Julian R. Sterling.The book on Amazon →
One Excel workbook that puts figures on the area the book calls the most heavily scrutinised in private markets compliance, and turns “test periodically” into a number you can defend, now corrected. Around it, a blank version for your own fund, thirteen working documents to print, forty questions that mark themselves, and three cases the book does not work. All free. Nothing is gated behind a sign-up, and no email address is asked for.
Six workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 24 September 2026.
Get an email if these files are corrected
Optional. When a workbook on this page is corrected or a new worked case goes up, readers on the list get one email, plus a short note when a new book comes out. The downloads do not need it.
Chapter 10 says the amounts can be large and the stakes enormous. Chapter 13 says to
test. Neither contains a figure. But a compliance officer cannot escalate an adjective:
“the amounts can be large” does not tell a COO whether to care, and
“test periodically” is not an answer to an examiner or a budget.
The grey zone, expressed as a fee. On a 500 million fund with 1.2 million a year
of genuinely ambiguous costs, resolving a quarter of them the firm’s way is worth 3 million
— the same as charging 2.06 per cent instead of 2.00, undisclosed. That
translation is the useful part: forty small judgement calls are impossible to raise in a partners’
meeting without sounding pedantic. Six undisclosed basis points ends the discussion.
The broken deal, four ways. The book’s own illustration, with numbers on it.
The flagship’s share runs from 1.25 million to 2.50 million depending on which
defensible method is applied — half the cost of the deal, turning on a choice
no document compels. And of the four methods, only one costs the firm anything, which is the first
thing an examiner will notice about your policy. For an investor with a million committed to the
flagship, the choice is worth 625 if the flagship is two billion; the
3,125 the book prints divides by the flagship’s 400 million ticket in the deal, not by the fund,
so it is only the ceiling.
Two words in a fee schedule. Move consulting and board fees from offsettable to
not, and the firm keeps 2 million more — two per cent of every management
fee the fund will ever pay. It is a switch in the file; flip it and watch.
And how much testing is actually enough. There is an exact answer:
n = ln(1−confidence) / ln(1−error rate). To be 95 per cent confident that
under 5 per cent of allocations are wrong, test 59 items. Test twenty and find
nothing — which is what many programmes really do — and all you have established is that
the error rate is probably below 14 per cent. The 59 items cost about
four working days a year. Sixteen checks.
Open the sampling sheet and put your own number in. Most programmes test somewhere between ten and
thirty items and describe it as periodic testing. Read off what that actually proves, then read off
what fifty-nine proves and what it costs. The gap between the informal habit and the
defensible standard is about two and a half days of one person’s year — which is
a much easier conversation than the one that follows an examination finding.
What the arithmetic does not settle
It cannot tell you which grey-zone costs belong to the fund; that is what the documents, the
disclosure and your judgement are for. It cannot make an allocation method fair — only fixed in
advance and consistently applied, which is the chapter’s point and remains right. And the
sampling sheet is attribute sampling: it tests whether items are right, not how wrong they are, so a
programme should test by value as well. It also assumes a genuinely random sample; testing the items
finance hands you tells you about those items and nothing about the population.
The same model, for your own fund
The workbook with every input emptied. Enter your own fund, expense base, broken deal and fee schedule; the checks sheet counts what is still missing and tests what holds for any inputs.
Appendix F · Chapters 10 and 13
A blank fees, expenses and testing model
Commitments, fee and fund life, the fund-borne expenses and the part of them that is genuinely ambiguous, the last broken deal with each vehicle’s ticket and the flagship’s own commitments, the portfolio-company fees with a yes or no for each as your documents categorise it, and the minutes it takes to test one item. The file gives the grey zone as a fee, the broken deal four ways with what the choice is worth per million committed, what the offset categorisation keeps for the firm, and the sample sizes with what they cost.
The book’s inputs are listed in a text file inside the archive. Type them back in and the file returns 2.06 per cent, 1.25 to 2.50 million, 625 per million committed, 2 million kept and 59 items.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 2 to 14 · Appendices B, C and F
Thirteen working documents
The risk assessment, scored and traced to a control and a test. The Appendix B program checklist with an evidence column. The Appendix C calendar by month and owner. The code of ethics, with its acknowledgement and periodic certification. The pre-clearance, gifts and outside-activity logs. The restricted list, the wall-crossing log and expert calls. The conflicts register and a conflicted decision recorded. The marketing review record for a performance page. Oversight of valuation and of service providers. The three fee and expense numbers of Appendix F. Investor onboarding, beneficial owners and sanctions. The testing plan and sample record, with the remediation loop. And examination readiness with the findings tracker.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Eight on the function, the program and governance, eight on conduct, MNPI and conflicts, six on marketing, valuation and fees, five on financial crime, vendors, testing, examinations and the career, eight on Appendix F and the workbook, and five on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapter 13 · Appendix F · Case one
The sample that found two
Chapter 13’s expense test finds two wrong charges; Appendix F sizes the sample at 59 “if all 59 are clean”. With two errors, the 59 no longer support the claim: at 95 per cent the error rate is only known to be below 10.3 per cent. Making Appendix F’s claim again takes 124 items, 65 more, all clean; the ladder is 59, 93, 124 and 153 for none to three errors. On a quarter of 240 charges (ADDED) the finite population trims it to 104.
Chapters 10 and 8 · Case two
The facility that raises the IRR
Chapter 10 names the effect of fund-level credit facilities on reported returns and gives no figure. Four deals returning 2.0× in four years, a facility at 6 per cent drawn 180 days (all ADDED): the IRR rises from 18.91 to 20.83 per cent while the investors pay 11.8 million of interest and their multiple falls to 1.943. Any facility cheaper than 18.1 per cent raises the IRR, so the direction is never in doubt, only the size.
Chapters 7 and 13 · Case three
A year of allocations
Chapter 7’s flagship and newer fund, twelve shared deals, a policy of pro rata to available capital (all ADDED). Over the year the newer fund took exactly its 27.3 per cent, so the aggregate test passes. Deal by deal, five of its six overweight deals carry the six best marks: a pattern that arises by chance 4.0 per cent of the time, and 72.6 million of gain moved from the flagship’s investors to the newer fund’s track record.
Every figure is illustrative, as everything in the book is. The fund, the firm, the deal and the
amounts are invented. The arithmetic is not, and the sampling result applies to any population.
Opening the file
The workbook opens in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. It uses no
macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to
update links on opening, decline — there are none.
What changed, and when
24 Sep 2026
The book’s workbook corrected: Appendix F’s broken-deal choice, “about 3,125” per million committed to the flagship, divides by the flagship’s 400 million ticket rather than its commitments; with the commitments as an added input of two billion it is 625, and 3,125 is its ceiling. Sixteen checks. Added: a blank version, thirteen working documents, forty questions that mark themselves and three new cases. The workbook can now also be downloaded on its own.
How is the Form 13F $100 million threshold calculated?Add every 13(f) security across all accounts you manage at each month-end: a PE adviser at 96.48 million in September crosses at 105.72 in October, and must file.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
Go beyond the companion files
The Private Fund Compliance Officer develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
If this book helped — or didn’t — a few lines on Amazon are worth more than they look: they are what the next reader goes on. Write a review. The workbook stays free either way.