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Private funds: You may know them as hedge funds or private equity funds. You might think they don’t matter to everyday investors and companies. Or do they?

Private funds, like private equity funds and hedge funds, pool money of investors, and those investors generally are called limited partners.

But who are those limited partners? Now, sometimes they’re wealthy individuals. Often, though, they’re retirement plans, like state government pension plans. Or they’re non-profit and university endowments. The people behind those pension plans and endowments often are teachers, firefighters, municipal workers, students, and professors.

In essence, they’re you.

And who are the people raising money from the private funds? They’re entrepreneurs, trying to turn big ideas into big companies. They’re small business owners looking to hire employees, invest in new technologies, and grow. They’re managers of late-stage companies bought and sold by private equity firms.

Now, in total, these funds manage about $17 trillion—not a small number.

Out of those assets, they take multiple types of fees— annual management fees, something called performance fees, and in the private equity world, they are also taking money from the portfolio companies.

Now, I wonder whether pension funds, endowments, and other fund investors have enough transparency about all of those fees.

Back when I was on Wall Street some time ago, there was a model that there would be this 2 percent annual management fee and 20 percent performance fee.

What’s happened since those years? Well, we’ve seen significant reductions over time in the fees of mutual funds or those index funds that we might invest in. The private fund fees, though, they haven’t come down in a comparable way.

While we don’t know all of the exact costs inside the businesses, there may be more than $250 billion a year in fees in these funds.

That’s $250 billion that these funds are taking in fees rather than maybe their portfolio companies getting better funding to fund innovation, hiring, or growth, or we as investors might be getting or the pension funds getting on our behalf.

That’s why I think it’s time we take stock of the rapid growth and changes in private funds to bring more sunshine and competition to this space.

This might mean increasing transparency with regard to the fee arrangements or something about the performance metrics. It might mean leveling the playing field with respect to the special terms that limited partners develop—so called “side letters,” special deals.

If we can use our authorities here at the SEC to bring greater efficiency, transparency, and competition in the market, this could mean portfolio companies could raise money a little more easily. It means that the pensions and endowments that are investing money on your behalf might get a better return.

Making the middle of the market more efficient helps folks on both sides: investors in one hand—kind of us—and the companies on the other hand.

So that’s why private funds and what we do at the SEC matters to everyday investors like you.