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    Sep. 3, 2026

LP Portfolio Financing Facilities: Key Terms of the Emergent Liquidity Option for Fund Investors (Part One of Two)

To obtain liquidity amidst a dearth of distributions, LPs are increasingly pledging their interests in private funds as collateral for financing facilities. Structurally similar to net asset value facilities used by sponsors, LP portfolio financing facilities are becoming popular among all types of borrowers – especially family office and institutional investors – and lenders. As a relatively new form of financing, however, the market around key terms and provisions in financing agreements is still evolving, and many LPs are unaware about the facilities as an alternative source of liquidity. This first article in a two-part series explores the trends driving the growing use of LP portfolio financing facilities; describes the types of LPs and lenders pursuing the facilities; and details some of the key terms and conditions the parties negotiate when putting the facilities in place. The second article will delve into certain challenges that LP portfolio financing facilities pose, including dealing with distributions and valuations in the context of the loan-to-value ratio and how to ensure lenders are protected in event of default scenarios. See “What Does It Take to Get Across the Finish Line in the Current Fundraising Environment?” (Mar. 7, 2024).

Risks for Fund Managers Using Secondary SPV Platforms to Gain Exposure to Late‑Stage Private Companies

Secondary markets for late-stage private companies have become an increasingly important avenue for fund managers seeking to give institutional investors exposure to companies such as Anduril Industries, OpenAI and other venture-backed unicorns. The principal legal risk, however, is often more fundamental than valuation or IPO timing: what legal asset will a fund actually acquire from the secondary trading platform, and does that asset confer enforceable rights that the underlying issuer will recognize? Recent issuer warnings, regulatory actions, bankruptcies and criminal cases demonstrate that fund managers should approach these transactions less like ordinary secondary purchases and more like bespoke private securities purchases requiring substantial diligence. For fund managers, diligence should focus on the legal integrity of the investment, including title, transferability, issuer recognition, transaction economics, governance rights and available remedies. In a guest article, Day Pitney partners Peter J. Bilfield, Erik A. Bergman and Matthew J. Letten distinguish between two related risk categories: (1) claims a fund manager may have against the platform if the promised exposure is not validly delivered; and (2) claims that LPs in the fund or other investors may assert against the fund manager if diligence, valuation, conflict review or disclosure are alleged to have been inadequate. In addition, the article suggests measures that fund managers can take as to platforms and their LPs, respectively, to mitigate the risks posed by each from these transactions. See “Secondaries Unlocked: A Market Grown Up and Continuing to Evolve” (Nov. 13, 2025).

Righting the Wrongs of PE Sponsor Efforts Before, During and After Continuation Vehicle Transactions

Continuation vehicles (CVs) have “moved from a niche secondary strategy to a mainstream exit path, but the legal execution has not gotten any easier,” observed Steve Bielecki, senior legal engineer at Ontra. “Recent high-profile litigation has put GP conflicts and LP consent processes under fresh scrutiny,” and every CV has unique LP advisory committee dynamics and limited partnership agreement (LPA) and side letter negotiations to navigate, he added. During a program devoted to the issues and challenges sponsors face during the CV deal process, Bielecki, together with Fried Frank partner Andrew Rearick and DLA Piper partner Adam S. Tope, examined initial steps sponsors take to prepare for a CV transaction; complications when communicating with existing LPs; challenges sponsors face when navigating consents, LPA amendments and conflicts of interest; and the timing and logistical obstacles that arise when closing the deal. This article discusses the key takeaways from the presentation. See “Morgan Lewis Survey Details Growing Consensus on Continuation Vehicle Fees, Expenses and Other Terms” (Jun. 25, 2026).

Beyond Blockers and Seasoning: Using Irish Treaty Funds and ELTIFs for European Distribution of Private Credit Funds

Bilaterally negotiated loans generate income effectively connected with a U.S. trade or business (ECI). For private credit funds with non‑U.S. or tax-exempt investors, the traditional structural answers – e.g., leveraged blockers and season-and-sell programs – surrender returns to tax leakage. An Irish treaty fund can eliminate that leakage outright for managers that satisfy the treaty’s tests, and the revamped European long-term investment fund (ELTIF) regime is opening retail capital in Europe just as sponsors most need to widen their fundraising nets. Those opportunities anchored a webinar moderated by Simmons & Simmons partner James McKnight, which featured Seward & Kissell partner Joseph M. Morrissey, Simmons & Simmons partner Martin Phelan and EisnerAmper partner Irina Kimelfeld. This article examines the panelists’ analysis of the ECI problem in loan origination and the tax leakages in certain structures; the ownership, base erosion and permanent establishment tests for accessing Ireland’s tax treaty with the U.S.; and the attraction of using an ELTIF to access European investors under the recast Alternative Investment Fund Managers Directive. See “European PE Fund Domiciles: How Does the U.K. Compare?” (Apr. 30, 2026); and “A U.S. Fund Sponsor’s Perspective on AIFMD 2.0” (Sep. 4, 2025).

OFAC Warns of Growing Use of Sham Transactions in Sanctions Evasion and Identifies Red Flags

On March 31, 2026, the Office of Foreign Assets Control of the U.S. Department of the Treasury issued a sanctions advisory (Advisory) calling attention to the growing dangers of sham transactions, whereby sanctioned persons or organizations use proxies and other surrogates to engage in transactions or make arrangements on their behalf, thereby evading sanctions and doing business behind a veneer of legality. The Advisory highlights the severe risks to national security and foreign policy that sham transactions pose and enumerates red flags to be aware of when vetting prospective investors or counterparties and reviewing existing relationships. This article summarizes the Advisory; details the red flags; considers the relative dangers facing PE and hedge funds, respectively; assesses the utility of the so-called “50‑Percent Rule” in sanctions compliance; and presents practical compliance takeaways for fund managers from legal experts. See “Rising Risks for PE Firms to Monitor Amidst Changing Antitrust, Whistleblower and Sanctions Landscape” (Jan. 11, 2024).

Derek Steingarten Joins Alston & Bird in New York

Alston & Bird has welcomed Derek N. Steingarten as a partner in its New York office. He advises registered and private fund managers on complex regulatory and transactional issues, as well as ongoing management and challenges related to fund formation, fund governance and regulations. For insights from Steingarten, see our two-part series on converting a private fund into a registered fund: “Trend, Drivers and Time Frame” (Mar. 5, 2026); and “Investor Relations, Track Record and Board of Directors Issues” (Mar. 19, 2026); as well as “SEC Walks Back 15% Cap on Private Fund Investments by Registered Closed‑End Funds” (Sep. 18, 2025).

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