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    Oct. 2, 2025

Executive Order on Alternative Assets in 401(k) Plans: Key Takeaways and Considerations (Part One of Two)

On August 7, 2025, President Donald J. Trump issued an executive order (Order) broadly supportive of including PE and other alternative asset classes in participant-directed defined contribution retirement savings plans (e.g., 401(k) plans). The Order instructs the U.S. Department of Labor (DOL) to reexamine past guidance as to fiduciary duties under the Employment Retirement Income Security Act of 1974 (ERISA), and to clarify its stance on offering private funds containing alternative assets in 401(k) plans. It also requires the SEC to consider ways to facilitate greater access to alternative assets for 401(k) plan participants. The Order is an important step in the ongoing “retailization” of the private funds space and the opening up of hotly desired, highly lucrative fundraising opportunities for fund managers. Legal experts interviewed by the Private Equity Law Report expressed concerns, however, that the Order’s nuances are not widely understood and that there are latent dangers from encouraging plan allocators to offer investments in alternative assets. This first article in a two-part series summarizes the Order; contextualizes past DOL guidance; offers relevant considerations that fund managers and plan sponsors should weigh; and considers the likelihood of immediate action. The second article will delve into the ERISA litigation risks that could result from including alternative assets in employee benefit plans, as well as certain factors that could reduce that risk. See “Retailization Season Is Heating Up: A Private Fund Manager’s Guide to Structuring, Procedures and Fundraising” (Jun. 12, 2025).

SEC Fines Sponsor for Overcharging PE Funds Via Improperly Applied Management Fee Offsets

The SEC filed a settled enforcement action (Order) against a PE sponsor on August 15, 2025, alleging the improper calculation of management fee offsets and the breach of its fiduciary duties. The SEC alleged that, by failing to defer interest on transaction fees in accordance with its funds’ limited partnership agreements, the sponsor functionally inflated its own revenue by adjusting downward the management fee offsets its funds were supposed to receive. With its focus on fee calculations and attendant fiduciary duties, the Order reflects the SEC’s ongoing focus on conflicts of interest violations regardless of its less aggressive posture toward private funds under Chairman Paul S. Atkins. This article summarizes the Order, examines how common the related management fee calculation practices are among PE firms, considers the ease with which inadvertent fee violations can occur and offers practical takeaways based on interviews with several industry experts. See “What to Expect From Today’s SEC Examinations and Enforcement Relating to PE Management Fees and Expenses (Part Two of Two)” (Oct. 5, 2023).

Performance Advertising Trends, Requirements and Guidance for Private Credit Strategies

Various factors shape how private credit managers enter the market and, in turn, what regulatory requirements their performance advertising needs to satisfy. The nuances are important, as the performance metrics required for private credit funds or separately managed accounts, which are becoming increasingly popular, impose different efforts and obligations on managers. Those are coupled with institutional investors’ growing insistence that managers comply with some – or all – of the CFA Institute’s Global Investment Performance Standards, as well as other ongoing compliance requirements (e.g., SEC’s Marketing Rule). To provide insights into current private credit industry trends and assist managers with practical guidance, ACA Group recently hosted a webinar that was moderated by partner Julia Reyes and featured her colleagues, Shivani Choudhary, managing director, and Gretchen Salisbury, director. This article summarizes the key takeaways from the presentation. See “ACC and EY Report Examines Growth Trajectory and Recent Trends in Private Credit” (Mar. 6, 2025).

Trends, Catalysts and Misconceptions in Alternative Fund Tokenization

The theoretical benefits that blockchain technology can offer the private funds industry have given way to tangible, practical implementation by fund managers and others in the financial industry. Adoption has moved lockstep with – and in response to – the comfort of buy-side participants with tokenization. Over time, the rate of implementation is likely to grow as fund managers are showing increasing interest in tokenizing their private funds and otherwise embracing blockchain technology. Those insights were unveiled by research conducted by IFI Global and STM.co on private fund managers’ adoption of tokenization. The research was conducted through desktop reviews, interviews and questionnaires completed by GPs, and the results were presented in a webinar moderated by IFI Global CEO Simon Osborn and STM.co COO Jason Barraza, featuring Keith O’Callaghan, head of asset management and structuring at Archax, and Sidney Powell, CEO of Maple Finance. This article summarizes the research findings, highlights the asset classes that are most commonly being tokenized, analyzes which buy-side participants are embracing tokenization and considers the future of blockchain technology in the private funds industry. For coverage of other IFI Global programs, see “Gauging European Investors’ Appetite for U.S. Funds and Considerations in Marketing to Them” (Nov. 14, 2024); and “Latest on Using Reverse Solicitation, Placement Agents, NPPRs and Other Potential Non‑AIFMD Options to Distribute in Europe” (Apr. 5, 2022).

When Investor Relations Become Procurement Lobbying

Employees in the investor relations departments of PE and hedge fund managers typically do not consider themselves “lobbyists.” But state and local regulators sometimes have a different view. This guest article by Covington lawyers Zachary G. Parks, Derek Lawlor and Kimberly Railey explains the types of investor relations activities that could trigger lobbying requirements; summarizes the state lobbying registration and reporting requirements that may apply to investment firms; and describes the potential penalties for violations of the rules. It also highlights elements of investment firms’ compliance programs that can help ensure they remain on the right side of these laws and includes a list of practical questions CCOs can consider. See our two-part series on clashes between investor relations and compliance: “Contexts and Reasons for the Strained Relationship and Potential Ramifications” (Mar. 16, 2021); and “Practical Tips for Building a Strong Partnership Between the Teams” (Mar. 23, 2021).

Dechert Welcomes Financial Services Partners Arina Lekhel and Rebecca Lee

Dechert has expanded its financial services practice with the addition of two partners – Arina Lekhel in New York and Rebecca Lee in Washington, D.C. The pair’s arrival strengthens the firm’s capabilities in private funds, rated note feeder funds and derivatives transactions. For insights from Dechert, see “Implications of SEC’s Co‑Investment Relief for BDCs and Registered Closed‑End Funds” (Aug. 21, 2025); and “Dechert and Mergermarket 2025 PE Outlook: Ongoing Fundraising and Liquidity Challenges” (Feb. 6, 2025).

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