• |

    Nov. 13, 2025

Secondaries Unlocked: A Market Grown Up and Continuing to Evolve

The rapid evolution of private fund secondaries has transformed the market into a dynamic ecosystem, marked by new asset classes, innovative deal structures and the influx of both specialized and retail capital. As private credit, real estate, infrastructure and venture capital carve out significant spheres of influence, the market is no longer tethered solely to traditional PE. Expanding secondaries to each of those asset classes brings different challenges and obstacles, however, in addition to the benefits that inure to sponsors and, most importantly, investors. In addition, the sophistication of continuation funds and the rise of evergreen vehicles have broadened access, diversified participation and refined the ways that investors can engage with private assets. Meanwhile, the willingness of primary investors to participate in syndicates and staple commitments underscores the increasing interconnectedness of primary and secondary transactions. In a guest article, Goodwin Procter partners Michael R. Halford and Jacqueline Eaves highlight those latest trends in the growth, evolution and, to some extent, future of the secondaries market. For additional insights from Eaves, see “Emerging Trends in the Evolving Continuation Fund Market” (Jul. 12, 2022).

Non‑Solicitation Clauses, Track Record Portability and Other Obstacles to PE Spinouts (Part Two of Three)

Even when a principal and PE firm agree that it would be mutually beneficial to spin out an investment strategy, the parties’ competing interests can lead to difficult negotiations to finalize the arrangement. Understandably, the primary source of tension is how the spinout will impact underlying investors – not only in terms of obtaining their consent, but also fundraising from them in the future. Although those challenges can be overcome when a spinout is amicable, they can also flare up – both during and after the spinout – when the situation becomes more contentious. This second article in a three-part series explores some obstacles that legacy firms and principals need to navigate to complete a spinout. The first article explained what PE spinouts are, why parties pursue spinouts and what factors impact the timeline for a spinout. The third article will detail certain economic and operational terms negotiated as part of the ongoing relationship between the two entities, as well as certain post-spinout complications that arise. See “Planting a Seed or Securing an Anchor: Finding Success As an Emerging Manager” (Nov. 14, 2024); and “The New Trend in PE Fund Seed Investments, Unique Deal Features and Several Options for Seed Sources” (Mar. 17, 2020).

ILPA Releases Updated Capital Call and Distribution Template

In September 2025, the Institutional Limited Partners Association (ILPA) published an updated version of its capital call and distribution template (Template). The Template contains a number of valuable updates aimed at advancing more standardized, industry-wide practices as to the accounting and reporting aspects of capital calls and distribution notices, and leaves other characteristics of the Template’s 2011 predecessor unchanged. ILPA encourages GPs of closed-end private funds to begin implementing the Template for all funds launched on or after the first quarter of 2026. In theory, the Template will both ensure more granular reporting and promote cross-functionality among different ILPA reporting templates – particularly, the reporting template and new gross‑up and granular methodology versions of the performance template issued in January 2025. Investors may question specific revisions, however, such as changes requiring GPs to report certain transactions under the “Recallable Distributions” category. This article summarizes key changes introduced by the amendments to the Template, with additional analysis provided by interviews with legal experts. See “Key Features and Benefits of ILPA’s Updated Reporting Template and New Performance Template” (Mar. 20, 2025).

Luxembourg Carried Interest Reforms Offer Certainty on Tax Treatment

The Luxembourg government recently presented a draft bill (Bill) that would provide fund managers and their employees with greater legal certainty on how carried interest will be treated for tax purposes, as well as competitive tax conditions relative to other E.U. jurisdictions. The hope is that the clarity offered by the Bill will cause more high-level PE talent to relocate to Luxembourg, further bolstering its status as a lynchpin in the industry. The broader context and potential impact of the anticipated reforms were discussed by a panel at the Association of Luxembourg Fund Industry (ALFI) Private Asset Conference. Moderated by Keith O’Donnell, managing partner at ATOZ Tax Advisers Luxembourg, the panel featured Paddy Croft, head of tax at Astorg Asset Management, and Magnus Pantzar, global head of tax and structuring at EQT. This article summarizes the key takeaways from the program. For more insights from ALFI, see “ALFI/KPMG Survey Details Evolution and Growth of Luxembourg Private Debt Funds” (May 18, 2021); and “ALFI Chairwoman and Director General Discuss Luxembourg Fund Structures, FinTech and Brexit” (Sep. 3, 2019).

SEC Staff Discuss Regulation S‑P Amendments and Related Examination Processes

The SEC’s 2024 amendments to Regulation S‑P (Amendments) require covered firms to adopt and implement incident response programs, which must provide for notification of customers affected by breaches and oversight of service providers that hold customer information. In anticipation of the December 3, 2025, compliance date for large firms, the SEC is holding a series of outreach events to promote readiness for compliance. “The SEC has long prioritized safeguarding customer information and ensuring robust customer protection through strong compliance,” said Keith Cassidy, acting Director of the SEC Division of Examinations (Exams) and National Associate Director of its Technology Controls Program, at the first of such events. The Amendments are designed to ensure customers “have notice of [a] covered institution’s potential data breach and take steps to protect themselves if they choose,” he added. This article synthesizes the key takeaways from the event on September 25, 2025, which included staff from Exams and the Divisions of Investment Management and Trading and Markets. As is customary, the views expressed by the speakers were their personal views, not those of the SEC or any commissioner. See “Division of Investment Management Staff Discuss Staffing, Operations, Rulemaking and Other Developments” (Oct. 16, 2025); and “Six Steps to Address the SEC’s Trump Era Cyber Enforcement Priorities” (May 15, 2025).

Davis Polk Welcomes Private Credit Specialist in New York

Oran Ebel has joined Davis Polk as a partner in its investment management practice in New York. He advises on the structuring, formation and operation of private funds, with particular expertise in private credit strategies. For insights from Davis Polk, see our two-part series: “GP Clawbacks and Related Risk Mitigation Tactics LPs Pursue to Prevent Overpayment of Carried Interest (Part One of Two)” (Apr. 3, 2025); and “Protections GPs Negotiate in LPAs and With Senior Personnel to Curb the Burden of Clawback Obligations (Part Two of Two)” (Apr. 17, 2025).

Most-Read Articles