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    Sep. 4, 2025

Growing Popularity, Numerous Benefits and Operational Obstacles of Retail Distribution Platforms (Part One of Two)

Even as SEC officials make public statements in favor of expanding retail investor access to private funds, many fund managers have faced difficulties accessing those investors and marketing their products more widely. In addition to regulatory hurdles, fund managers have been forced to confront the reality that retail investors typically lack the sophistication and resources of institutional investors. Those obstacles provide an impetus for managers’ growing use of retail distribution platforms, such as wirehouses, independent broker-dealers and independent registered investment adviser (RIA) platforms. Listing on those centralized platforms provides fund managers the opportunity to efficiently offer their fund products to a broad range of financial advisors or RIAs, as applicable, and, through them, to a substantial swath of retail investors. This first article in a two-part series explores fundamental obstacles managers face to accessing retail investors; the three categories of retail distribution platforms and the benefits they offer; and certain operational considerations managers must weigh before pursuing a listing on a platform. The second article will delve into the selection criteria and due diligence processes that platforms use to evaluate fund products, as well as potential pitfalls of being listed on a platform. See “Retailization Season Is Heating Up: A Private Fund Manager’s Guide to Structuring, Procedures and Fundraising” (Jun. 12, 2025).

A U.S. Fund Sponsor’s Perspective on AIFMD 2.0

As the April 2026 implementation date for the recast Alternative Investment Fund Managers Directive (AIFMD and, as recast, AIFMD 2.0) draws closer, U.S. private fund sponsors face a targeted shift in the E.U. fund regulatory landscape that requires careful consideration and planning. Although AIFMD 2.0 amounts more to a series of targeted amendments than a complete overhaul of the existing AIFMD framework, a number of changes will be of particular importance to U.S. fund sponsors marketing into or otherwise operating in Europe. In a guest article, Sidley Austin attorneys Leonard Ng and Arash Dashtgard focus in detail on two specific changes introduced under AIFMD 2.0: amendments to the conditions to marketing under the National Private Placement Regime, and the introduction of a harmonized E.U. regime for direct lending (or “loan originating”) funds. In addition, this article briefly discusses other changes relevant to U.S. fund sponsors, including revisions to the delegation regime, and the expansion of the information required under the investor disclosure and regulatory reporting requirements. See “Gauging European Investors’ Appetite for U.S. Funds and Considerations in Marketing to Them” (Nov. 14, 2024).

White Deer Sanctions Settlement Underscores the Importance of Post‑Acquisition Cleanup

White Deer Management (White Deer), a PE firm headquartered in Houston, has obtained a declination following self-disclosure of violations of sanctions and export laws committed by a recent acquisition, the first of its kind under the M&A safe harbor provisions of the DOJ National Security Division’s Enforcement Policy for Business Organizations (Policy). In its pre-closing due diligence of Unicat Catalyst Technologies, a supplier of catalyst products used in petrochemical refining and steel mills based in Alvin, Texas, White Deer missed a crucial document. As a result, the firm was unaware of Unicat’s dealings with customers in Iran, Syria, Cuba and Venezuela until well after the deal closed. This article examines how the Policy functions in practice and the compliance takeaways for PE firms and other acquirers. See “Investment Adviser Avoids Civil Penalty Due to Self-Reporting, Remediation and Cooperation: True, False or Other?” (Oct. 31, 2024).

Checklists to Help Fund Managers Comply With SEC Recordkeeping Requirements

In the wake of a heavy volume of SEC enforcement actions against investment advisers for failures to comply with prohibitions against off-channel communications, recordkeeping compliance has become all the more urgent. Advisory firms report that they receive frequent inquiries about what specific records they may or may not have to maintain, in what form and for how long. Many fund managers want to know whether external service providers can domicile records that they are required to keep, without falling afoul of in-house recordkeeping requirements. Adding further complexity are the myriad formats in which records now exist. For some fund managers, compliance could be challenging even without the pervasive and growing use of off-channel devices and methods, such as texting and social media apps, to send and receive business-related communications. This article summarizes the various records that fund managers operating under the SEC’s purview are required to keep and in what format; discusses the challenges of complying with the recordkeeping requirements; presents legal commentary on the significance of recent regulatory actions concerning books and records; and offers downloadable checklists that CCOs can use when reviewing the records they maintain to ensure they are in compliance with the recordkeeping requirements. For other compliance checklists, see “SEC Risk Alert and Accompanying Checklist Explains Examinations Process and Identifies Key Documents to Have Ready” (Nov. 2, 2023); and “A Checklist for Advisers to Guide Compliance With the Marketing Rule” (Oct. 25, 2022).

How SPV Strategies and Models Are Driven by Regulatory Pressures and LP Demands

In a challenging environment riddled with geopolitical tensions, inflation and increasingly burdensome regulatory requirements, CSC’s second annual report, “SPV Global Outlook 2025” (Report) found that GPs are turning to outsourcing and technology to manage the growing complexities involved with managing special purpose vehicles. The Report is based on research commissioned by CSC in the first quarter of 2025 that surveyed 400 GPs based in Europe, the Americas and Asia Pacific, with an even split between GPs focused on real assets (real estate and infrastructure) and private capital (PE and private debt). CSC’s primary focus was on assessing how GPs are optimizing processes for dealmaking and ongoing administration. This article summarizes the key findings and commentary from the Report. For coverage of another CSC report, see “Current Trends and Pressure Points in Negotiations Around Distribution Waterfalls” (Jan. 23, 2025).

PE Funds Partner Joins Sidley Austin in Chicago

Sidley Austin has welcomed John M. Muno to its Chicago office as a partner in the firm’s investment funds group and leader of its PE funds practice. He focuses on the formation and operation of PE funds across a wide range of strategies, including leveraged buyouts, distressed investments, secondaries, growth equity and fund of funds. See “Differences in Key Documents, Fund Terms and Economics When PE Sponsors Launch Secondaries Funds (Part One of Two)” (Apr. 20, 2023); and “When East Meets West: Ten Considerations for VC Managers Launching ‘Evergreen’ Funds and Hedge Fund Managers Launching PE Funds” (Aug. 3, 2021).

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