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    Jun. 12, 2025

Retailization Season Is Heating Up: A Private Fund Manager’s Guide to Structuring, Procedures and Fundraising

Private fund managers are increasingly launching retail alternative products to access broader mass affluent distribution channels, raise sticky long-term capital, generate more fees, diversify their product line and grow significant assets under management. Amid ongoing industry consolidation in the U.S. and Europe, investment managers traditionally focused on private credit, PE (including venture capital and growth equity) and real estate are expanding their platforms through vehicles such as business development companies, interval funds, tender offer funds and non-traded real estate investment trusts. Those vehicles offer a means to tap into the retail market and can be designed to co‑invest alongside existing institutional private funds. Fund managers accustomed to institutional capital typically draw on coordinated teams of private fund and registered fund experts to add new distribution channels to their business. Launching a retail alternative product is more than the addition of a new fund or an extension of an existing private fund, however; it is an entry into a well-established regulatory framework, with distinct operational nuances and a broader distribution network. In a guest article, Alston & Bird partners Heather N. Wyckoff and George M. Silfen outline the key issues – notably, the structural, procedural and fundraising considerations – for private fund managers seeking to launch retail alternative products. See “Inherent Obstacles and Promising Pathways to Retailization in the PE Industry” (May 29, 2025).

Key Terms and Negotiating Positions in Co‑Investment Equity Commitment Letters (Part Two of Two)

As the market for co‑investments matures, fund sponsors are increasingly seeking equity commitment letters (ECLs) from co‑investors as a way of securing their commitments, binding them to provide capital when it is called and spreading certain deal risks that can arise (e.g., broken deal expenses). Prospective co‑investors are becoming savvier about critical considerations associated with ECLs, however, and are pushing back on some points in negotiations. Although the growing use of ECLs for co‑investments has led to a degree of standardization, there is still room for sponsors and co‑investor LPs to negotiate about key terms and requirements therein. This second article in a two-part series offers tips and suggestions for which terms to include in ECLs, and what each party should seek to achieve with them. The first article covered the pros and cons of using ECLs, how they are commonly structured and certain other logistical considerations related to their use. See “Latest on Key Terms, Structuring Approaches and Trends in Secondary Transactions and Co‑Investments (Part One of Two)” (Jan. 11, 2022).

Connecting the Dots of the Audit Cycles of PE Funds and Portfolio Companies

Although PE funds and their portfolio companies are both audited, the professionals involved may know only one side of that equation. Streamlining the processes and timelines of those audits can offer material benefits for sponsors, particularly for reporting fund performance, using portfolio company valuations to develop exit strategies and monitoring ongoing fund performance metrics. To help simplify the complexities and offer strategies to enhance PE audit processes, Carta and Citrin Cooperman hosted a webinar that was moderated by Jason Fleming, senior manager of fund administration at Carta; Candice Bassell, senior director of auditable reporting services at Carta; Simon Jewkes, partner in the transaction advisory services practice at Citrin Cooperman; and James Catalano, audit partner at Citrin Cooperman. This article summarizes key takeaways from the discussion, including an overview of the audit life cycle for PE funds and their portfolio companies; best practices for valuations; how PE funds and portfolio companies can work together during the audit season; and the evolving role of technology in the audit process. See “What Investors Should Look for When Scrutinizing PE Sponsors’ Audits During ODD” (Feb. 20, 2025).

SFDR Impact Analysis Finds Sustained Growth in E.U. Sustainability‑Focused Funds, Despite U.S. Headwinds

Amidst the growing chasm between the E.U.’s embrace of sustainable investing and the strong, politically motivated pushback in the U.S., the number of funds launched that satisfy the requirement of the E.U. Sustainable Finance Disclosure Regulations (SFDR) has continued to grow each year. That growth is happening amidst fund managers’ efforts to bridge the geographic divide, while also preparing for a slew of E.U. regulatory efforts to streamline and simplify the requirements associated with offering sustainability-focused funds. Against that backdrop, Maples Group recently released its third SFDR Impact Analysis (Report) to provide managers with practical insights on the current state of sustainable investing in Europe and how the SFDR is likely to evolve in the future. The analysis focused on the two largest fund domiciles in Europe – Luxembourg and Ireland – and reviewed more than 27,000 active funds in those jurisdictions. This article summarizes the key takeaways from the Report for private fund managers. For coverage of Maples Group’s 2024 analysis, see “Rise of SFDR‑Compliant Funds Is Effectively Shifting Private Assets to Support European Net Zero Goals” (Sep. 19, 2024).

Survey Finds Increased Value in Having a Culture of Compliance

The compliance function is all too often viewed only as a cost center, with compliance professionals left out of the business conversation. The 2025 Compliance Leadership Redefined survey conducted by FTI Consulting and Ethico reveals that compliance professionals have an opportunity to reintroduce themselves to leadership and help redefine their roles and how they are perceived within their organizations. This is the second iteration of the survey, which was first conducted in 2023. There is a “massive amount of unrealized potential” for compliance teams to have a positive impact on their organizations, according to the survey report. In a program discussing the findings, Ethico co‑CEO Nick Gallo and FTI Consulting managing directors Angie Gorman and James Condon explained how compliance professionals have an opportunity to break the stigma of being seen as the “office of no” and become integral parts of the business. This article distills the key takeaways from the survey report and the speakers’ insights. See “Taking the Pulse of Recent Developments Affecting CCO Liability and the Establishment of a Compliance Culture” (Apr. 20, 2023).

Simpson Thacher Enhances Private Funds and Investigations Practices With Three New Hires

Simpson Thacher has announced the addition of three partners. Adam S. Aderton and Anat Holtzman will be based in the firm’s office in Washington, D.C., and Joanne Mak joins the London office. For insights from the firm, see our two-part series: “GP Clawbacks and Related Risk Mitigation Tactics LPs Pursue to Prevent Overpayment of Carried Interest” (Apr. 3, 2025); and “Protections GPs Negotiate in LPAs and With Senior Personnel to Curb the Burden of Clawback Obligations” (Apr. 17, 2025).

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