For decades, private fund strategies were the domain of institutional investors and the ultra-wealthy. That exclusivity is ending as private strategies migrate into retail vehicles designed to hold illiquid assets within a retail regulatory framework.
Many in the crypto space greeted the second Trump Administration with excitement. The first Trump Administration was crypto-friendly, but did not wholly overturn the existing securities framework for crypto assets. The Biden Administration was more skeptical of crypto, with then- Securities and Exchange Commission (SEC) Chair Gary Gensler embracing the Howey test for securities. Crypto supporters thought 2025 might bring about the industry’s holy grail: a crypto-friendly regulatory framework allowing for crypto trading and offerings without the risk of civil (or criminal) inquiries down the line so long as the framework was followed.
Markets have recently been experiencing heightened volatility and credit availability has tightened, which has placed valuation practices under unusual pressure from regulators and investors. The events of the past several years, including rising interest rates, geopolitical turmoil and the impacts of artificial intelligence tools, among other issues, have amplified the inherent challenges of valuing illiquid assets and sparked greater regulatory scrutiny. This is particularly true when marks affect fees paid by investors, or the prices at which they invest in or redeem from a fund.
GP-led secondary transactions continued to soar in popularity in 2025. With mixed economic indicators potentially impeding other kinds of private equity exit events, the uptick in continuation funds shows no signs of slowing down in 2026. Their popularity should come as no surprise—under the right conditions, a secondary transaction creates a win-win scenario for all stakeholders, providing legacy investors with near-term liquidity and an option to roll over their investments, new investors with an opportunity to invest in portfolio assets with a proven track record but greater room for growth, and fund advisers with an extended period to capture future upside as well as the potential for new capital to support portfolio assets.
Choose your words carefully because careless words cost.
Never has this been more true than in disclosures about environmental, social and governance matters. As divergence between the US federal government and “red states” on the one hand, and the UK, EU, and certain US “blue states” on the other hand, solidifies, international asset managers and their underlying portfolio companies must navigate an increasingly narrow regulatory tightrope.
As has been widely reported, digital infrastructure has become one of the fastest growing investment structures in recent years, most recently driven by the explosion in demand from firms in the artificial intelligence (AI) industry. This in turn has led to unprecedented needs for capex spending for the construction, expansion and upgrading of data centers, cell towers and networks, fiber optics and other data transmission facilities and power production and transmission.
Private credit has spent a decade rising from niche alternative to central pillar in global finance. It has become a multi-trillion-dollar engine of corporate lending, infrastructure finance, asset-based credit, specialty finance, and opportunistic capital. While financial regulators have so far taken a relatively hands-off approach, elements of the market and the financial press have raised concerns about longer-term risks arising from the growth in private credit.
If we had to define the mood for 2026 in three words, we would choose alert, intentional and institutional. After several years of normalizing longer hold periods and navigating evolving regulatory frameworks, 2026 will see managers permanently vigilant – vigilant in pursuing value creation theses, identifying exit opportunities and embedding robust governance structures to mitigate litigation and regulatory risks.
An action recently filed in the Delaware Court of Chancery challenging a continuation vehicle transaction offers a rare public window into a dispute over a GP-led transaction. The complaint alleges issues around valuation, disclosure and economic terms, and highlights the conflicts and process risks that can arise in these transactions.
In July 2025, the SEC settled charges against the Chief Compliance Officers (CCOs) of two investment advisers that involved backdating compliance documents and attempting to conceal these fabrications from examiners. The settlements imposed civil monetary penalties for both officers as well as a three-year bar for the more severe violation.
These actions reinforce a lesson that should be familiar: regardless of the party in power, regulators do not look kindly on backdated documents or attempts to mislead them. While most CCOs would never consider engaging in similar conduct, any action against a CCO in their personal capacity inevitably raise broader questions in the industry about what other actions could expose a CCO to personal liability. Put another way: most CCOs understand not to go 60 miles per hour in a school zone, but what if they roll through a stop sign?