The Securities and Exchange Commission’s Division of Investment Management experienced a 24% reduction in staff during fiscal year 2025, according to a Government Accountability Office report published Friday. That division is responsible for oversight of hedge funds, private credit firms, mutual funds and a range of investment products.
The GAO noted the decline occurred amid broader staffing losses at the SEC, which shed roughly 18% of its workforce for the fiscal year that ended September 30, 2025. The report said most employees who left the agency accepted a voluntary departure incentive. The SEC did not conduct involuntary terminations tied to executive actions in 2025, the GAO added.
Interview material cited in the report highlighted concerns about the institutional knowledge lost when staff departed. In interviews conducted in May and June 2025, the GAO spoke with 61 SEC employees; 33 of those interviewees indicated that the employees who left possessed unique knowledge or specific subject-matter expertise. The Division of Investment Management itself identified what the GAO described as "lost expertise on rulemaking" following the staffing reductions.
The staff departures occurred at a time when private credit funds were already facing heightened scrutiny and investor anxiety. The report pointed to recent actions by large managers in the sector as context, noting that Apollo Global Management Inc. (NYSE:APO) and Ares Management Corp. (NYSE:ARES) had recently prevented some investors from withdrawing portions of their money from funds.
The GAO said the SEC implemented personnel changes in response to executive orders and direction from the administration. As part of those adjustments, the agency paused its leadership development program in 2025 because of uncertainty about whether and when advancement opportunities would be available. In December 2025 the SEC submitted a staffing plan that identified positions for potential hiring across each division and office.
The findings in the GAO report point to both an operational shift within the SEC and potential implications for the divisions charged with overseeing complex investment vehicles. The report documents the scale of attrition, the voluntary nature of most departures, and internal acknowledgment of the resulting gaps in rulemaking expertise.