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    Oct. 30, 2025

Key Catalysts Behind the Emerging Trend of PE Spinouts (Part One of Three)

At first blush, the decision of an investment professional or team to spin out from a PE firm could be perceived as reflecting tension between the two parties. The reality is that there are many possible explanations for spinouts to occur (e.g., style drift, ambition), most of which mutually benefit the legacy firm, spinout manager and, most importantly, investors. Simply agreeing to proceed with a spinout is merely the first step, however, as the parties need to navigate a lengthy and fraught road of considerations, negotiations and processes to effectuate the arrangement. This first article in a three-part series explains what PE spinouts are, why parties pursue spinouts and what factors impact the timeline for a spinout. The second article will explore some obstacles that legacy firms and principals who are spinning out need to navigate to complete a spinout, including as to track record portability and non-solicitation clauses. The third article will detail some of the economic and operational terms negotiated as part of the ongoing relationship between the two entities, as well as certain post-spinout complications that arise. For more on the departure terms of management company and GP agreements, see our two-part series: “Governance and Economic Terms” (Oct. 20, 2020); and “Non-Competes and Principal-Departure Parameters” (Oct. 27, 2020).

Fund Structures and Operational Considerations for PE Sponsors to Access 401(k)s (Part Two of Two)

Despite offering exceptional returns over the last few decades, U.S. retirement savers have lacked access to alternative assets (e.g., PE, private credit, real estate, etc.) in their defined contribution plans (e.g., 401(k) plans) due to certain structural challenges and an abundance of regulatory ambiguity. Those impediments are slowly dissipating as the Trump administration and SEC have signaled strong support for retailization in recent months, and the alternative assets industry has made significant progress in developing 401(k) plan‑friendly products and other necessary solutions. Accordingly, the time finally seems ripe for fund managers to pursue opportunities with 401(k) plans. This second article in a two-part guest article series by Alston & Bird partner Blake E. Estes details 401(k) plan‑friendly product designs that fund managers can offer; other considerations to weigh when entering the 401(k) space; and the regulatory guidance that created past confusion and future hope for including alternative assets in 401(k) plans. The first article described the mounting pressure on 401(k) plan sponsors to offer access to alternative assets and the structural challenges impeding those efforts. See “SEC Panel Weighs Benefits, Challenges and Practicalities of Increasing Retail Access to Private Markets” (Jul. 24, 2025).

SEC Investor Advisory Committee’s Recommendations to Facilitate Retail Access to Private Markets

Given the rapid growth of private markets and the opportunities they present, the question of facilitating retail investor access has become increasingly pressing. To address that issue, the SEC’s Investor Advisory Committee (IAC) adopted the recommendations set out in a report prepared by its Investor as Owner and Market Structure subcommittees (Report). The IAC considers it necessary to recalibrate the existing regulatory framework, which is designed for a now-bygone reality in which most investment opportunities were in the public markets. The Report details the IAC’s recommendations for how to adjust the current framework to accommodate retailization while upholding the three pillars of the SEC’s mission. This article summarizes key takeaways from the Report, including the IAC’s recommendations for how registered funds can be improved as the best pathway for retail investors to access private markets and other guardrails that can be put in place. The recommendations are supplemented with related remarks delivered at the IAC meeting by SEC Chair Paul S. Atkins, as well as Commissioners Caroline A. Crenshaw and Hester M. Peirce. For coverage of other recent remarks by SEC Commissioners, see “SEC and CFTC Commissioners Call Out Impossible Standards and Ulterior Motives Driving Off‑Channel Communication Enforcement Efforts” (Nov. 14, 2024); and “SEC Commissioner Uyeda Discusses Private Offering Framework and Accredited Investor Definition” (Oct. 17, 2024).

Solutions to Tax Risks for Non‑U.S. Investors in Private Credit Funds (Part Two of Two)

Tax optimization is a material consideration when launching any private fund, but private credit strategies entail the particular challenge of ensuring earnings of non-U.S. investors are not treated as income effectively connected (ECI) to a “trade or business” (e.g., loan origination) in the U.S. Unfortunately, there is no single, universal approach that is best for avoiding ECI. Instead, fund managers are forced to weigh the pros and cons of several different fund structures to optimize the tax treatment of their private credit funds. To provide guidance on navigating the tax implications on non‑U.S. investments in U.S. private credit funds, Strafford CLE Webinars hosted a program featuring Proskauer partners Christine Harlow and Janicelynn Asamoto Park. This second article in a two-part series discusses the challenges of using hybrid funds for private credit strategies and details several fund structures that can mitigate potential tax harm. The first article described the ECI risks faced by non‑U.S. investors and the challenges with conducting a private credit strategy without operating as a trade or business in the U.S. See “Trends in Private Credit Structures, Terms and Adoption Amidst Its Growth During a Challenging Market” (Apr. 6, 2023).

Skills and Qualities of Effective Compliance Officers

The role of the CCO has evolved significantly in recent years, extending across industries. Contemporaneously, salaries have increased, although growth in compensation slowed in 2025 as compared to 2024, according to BarkerGilmore’s 2025 CCO Compensation Report. This article synthesizes relevant findings from the report and distills insights from the firm’s webinar, which included professionals from Radical Compliance and Spark Compliance Consulting, on the current market for CCOs; compensation trends; relevant skills and experience; and challenges facing dual-hatted GC-CCOs. See “To Work Effectively, CCOs Need Authority, Autonomy and Information” (Dec. 12, 2024).

K&L Gates Bolsters Private Credit Capabilities in London

Marianna Tothova has joined K&L Gates’ London office as a partner in the firm’s asset management and investment funds practice. Her practice focuses on private funds investing in various asset classes, with a particular emphasis on private credit and PE for both first-time and well-established managers. See “Performance Advertising Trends, Requirements and Guidance for Private Credit Strategies” (Oct. 2, 2025); and “SEC Examinations and Enforcement Staff Warn Against Certain Private Credit Practices, Fee and Expense Conflicts (Part Two of Two)” (Feb. 20, 2025).

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