Once merely a theoretical possibility, the retailization of the private funds industry has gained significant momentum of late. Fund managers are rapidly going to market with tailored retail vehicles, while SEC leadership and the current U.S. administration pursue measures to further improve retail access. Amidst that flurry of activity, some institutional investors are sounding alarms about potentially deleterious consequences of retailization on their interests. Whereas the private funds industry has long catered to institutional investors, many are now raising concerns about the future misalignment of their interests with those of GPs and retail investors. This first article in a three-part series delves into the market and regulatory efforts driving retailization, and how that is stoking fears among institutional investors. The second article will examine specific concerns about how retailization will affect everything from fund liquidity, governance rights and co‑investment allocations, with supporting insights from a white paper released by the Institutional Limited Partners Association. The third article will explore how the impact of retailization on managers’ operations will affect institutional investors, as well as mitigation tactics the latter can adopt to protect their interests. See our two-part series on retail distribution platforms: “Growing Popularity, Numerous Benefits and Operational Obstacles” (Sep. 4, 2025); and “Selection Criteria, Due Diligence Processes and Potential Pitfalls” (Sep. 18, 2025).