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    Jun. 25, 2026

PE and the Crime‑Fraud Exception: How the KKR Investigation Reshapes the Attorney‑Client Privilege

In connection with ongoing criminal litigation, the U.S. District Court for the District of Columbia authorized the DOJ to review documents that the DOJ alleged had been intentionally withheld by KKR from government antitrust regulators and enforcers. Notably, among the documents KKR was ordered to provide to the DOJ were communications between the PE firm and its lawyers at Kirkland & Ellis. For many in-house counsel and compliance officers at PE sponsors, the DOJ’s ability to obtain a court order permitting review of otherwise confidential, attorney-client privileged communications was a moment for pause. The court order highlights the risks posed when the DOJ can credibly argue that attorney communications and work product should be produced under the crime-fraud exception to the attorney-client privilege doctrine. The DOJ’s argument may be particularly compelling upon proof that certain documents likely reveal evidence of a crime, or when documents required to be produced were withheld intentionally as part of an alleged scheme to defraud either the legal process or the court itself. In a guest article, Olshan Frome Wolosky partner Derrelle M. Janey details relevant elements of the ongoing KKR investigation; the operative tenets of the crime-fraud exception to the attorney-client privilege; and the potential implications of the court order for M&A due diligence, fund governance, regulatory compliance and fiduciary obligation management. See “Understanding the Fiduciary Exception to Attorney-Client Privilege” (Oct. 19, 2023).

Analysis of Specific Elements of Proposed Form PF Amendments Impacting PE Sponsors (Part Two of Two)

Over the last several years, the SEC issued multiple rounds of amendments to Form PF that iteratively expanded the reporting obligations of, and corresponding compliance burden on, fund managers. Together with the CFTC, the SEC has sought to stem that tide by issuing a set of proposed amendments (Proposal) that would, if adopted as written, reduce the number of advisers required to file Form PF and, for those still obligated to file, the number of reporting requirements therein. When considered in their totality, the revisions in the Proposal have the most significant impact on the reporting obligations of hedge fund managers. A number of changes specifically impact PE and other closed-end fund managers, however, including eliminating the PE fund quarterly reporting requirement and requesting comments from the industry about whether to include information reporting for private credit funds. This second article in a two-part series provides detailed consideration of the Form PF revisions that are most applicable to PE sponsors, with a focus on the Proposal’s practical implications for sponsors’ day-to-day operations. The first article offered a high-level overview of the various changes to Form PF outlined in the Proposal, along with analysis from legal experts abouts its potential impact on the private funds industry. See “Division of Investment Management Staff Discuss Staffing, Operations, Rulemaking and Other Developments” (Oct. 16, 2025).

Morgan Lewis Survey Details Growing Consensus on Continuation Vehicle Fees, Expenses and Other Terms

Although the continuation vehicle (CV) market includes myriad structures, terms and fee arrangements, the market has increasingly achieved something close to consensus on a number of best practices and negotiated terms over the past five years. Achievement of broadly understood norms in the CV market – with certain exceptions, of course – is all the more notable given that they emerged despite the growing size and complexity of CV transactions, as well as the negotiating pressures caused by the increased prevalence of deals featuring multiple lead investors. Those points come across in Morgan Lewis’ Annual Continuation Vehicles Report: Perspectives (Report) that was released in May 2026. This article summarizes and presents key takeaways from the Report’s findings – with commentary from Morgan Lewis partners Ted Craig and Joseph D. Zargari – regarding the growing size of CV deals; limits in fund durations and extensions; the range of typical types of fees; the percentage thresholds of expense caps; ongoing reductions in sponsor commitments; and the scope of key person provisions. For analysis of Morgan Lewis’ 2025 CV survey, see “Continuation Vehicle Survey Highlights Increasing Convergence on Some Terms, Vicissitudes Among Others” (May 29, 2025).

Structuring PE Upper‑Tier Arrangements: Carry Economics, Governance and Restrictive Covenants

The governing agreements for the GP and management companies that sit above a PE fund determine how a sponsor allocates its economics, makes decisions and protects itself when employees depart. It is easy for founders to defer detailed consideration of the governance and operation of those upper-tier arrangements when a PE firm is first launched. Those early oversights can produce exceptional costs and complications years later, however, when a founder departs, two principals deadlock over the direction of the business or the next generation of leadership clamor for a greater role in managing its future. These issues related to upper-tier PE arrangements were the subject of a Practising Law Institute panel featuring Paul Hastings partner Amanda Persaud; Weil partner David J. Greene; Sidley Austin partner Jennifer A. Spiegel; and Kyndra Adair, in-house counsel at General Atlantic. This article details the basic economic tenets of a PE firm’s upper-tier structure, employee retention considerations that impact carry waterfall decisions, forfeiture provisions for unvested carry interests, economic distinctions of evergreen funds, governance models for management companies and the critical role of restrictive covenants in protecting a PE firm. See “Upper-Tier Structures and Key Considerations” (Sep. 7, 2023).

Court Rules for Investors in Lawsuit Over Negligent Private Fund Audits

On January 16, 2026, the Supreme Court of the State of New York issued a ruling (Ruling) in which it rejected a challenge to an arbitration panel’s findings that an auditor and its affiliates were negligent and had harmed investors by issuing clean audits of the fraudulent financial statements of several hedge funds. Although the investors did not directly retain the services of the auditor, they successfully argued that the facts of the case demonstrated “near-privity” between them and the auditor, distinguishing their lawsuit from others in which courts have found third-party service providers immune from investor lawsuits. Although the auditor has filed a notice of its intent to appeal, the lawsuit stands to have an impact on evolving views of the role of third-party service providers engaged by private funds. This article summarizes the Ruling, analyzes the reasons for the lawsuit’s success so far, examines changes in the standing of third-party providers once considered off-limits to lawsuits and assesses the possibility of similar lawsuits, with expert legal commentary. For more on audits, see “What Role Should the GC or CCO Play in the Audit of a Fund’s Financial Statements?” (Feb. 4, 2020).

Cleary Gottlieb Makes Notable Private Funds Addition in London

David Christmas has joined the London office of Cleary Gottlieb as a partner in its global funds practice group. He focuses on fund formation across a range of alternative asset strategies, including PE and private credit. See “European PE Fund Domiciles: How Does the U.K. Compare?” (Apr. 30, 2026); and “How to Manage Conflicts of Interest to Meet U.K. FCA Expectations” (Mar. 5, 2026).

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