USA – NEW YORK Trends and Developments Contributed by: Aaron Bourke, Tom Scriven, Bjorn Sorenson and Joshua Teitelbaum, RPCK Rastegar Panchal
RPCK Rastegar Panchal 60 East 42nd Street New York, New York 10165 USA
Tel: +1 212 594 9600 Fax: +1 347 772 3070 Email: contact@rpck.com Web: www.rpck.com
Market Reset and the Expanding Fund Design Toolkit Private markets entered 2025 in a mixed but stabi - lising position. Fundraising remains challenging as investors allocate selectively, yet deal and exit activ - ity have improved from the lows of 2022–23. This has placed a premium on structural innovation. Continuation funds, evergreen vehicles, NAV-based credit facilities, and blended tranches are no longer edge cases. They (along with GP-led secondaries) are now common means of managing liquidity pressures, attracting new investors, and realigning incentives. The clear trend is that fund design has become a cen - tral element of strategy, not just a matter of legal form. Continuation Funds and GP-Led Secondaries Continuation funds (CVs) and other GP-led secondar - ies continued to grow as a core liquidity solution. Mar - ket estimates suggest GP-led transactions accounted for more than USD70 billion of secondary deal flow in 2024, with multi-asset continuation vehicles and strip sales becoming increasingly common. NAV financing and preferred equity solutions often accompany these transactions, expanding the available liquidity toolkit. Features of these transactions remain familiar: a new vehicle capitalised by new and rollover investors; elec - tions for existing LPs to cash out or roll over; and a lead secondary investor setting price and terms. The investor base, however, is evolving. In addition to traditional secondary funds, wealth platforms and evergreen vehicles have begun to participate, bringing new expectations around disclosure and governance.
Conflicts of interest remain a defining issue. Even after the vacatur of the SEC’s Private Fund Adviser Rules, independent valuations, fairness opinions, and robust LP advisory committee engagement remain best practices. Overall, continuation funds have moved beyond being seen as exceptional liquidity fixes. They are increas - ingly viewed as strategic tools that extend value reali - sation horizons, introduce new capital partners, and re-underwrite key assets. Blended Finance Elements in Alternatives In addition to these liquidity tools, fund managers are experimenting with blended finance features that are now finding their way into mainstream alternative fund structures. Features such as first-loss tranches, guarantees, and concessionary anchors, once primar - ily associated with development finance institutions or philanthropic investors, are now being deployed in private equity and private credit funds. What was once viewed as a niche toolkit for impact-oriented strate - gies has begun to migrate into the broader alterna - tives ecosystem as sponsors and investors recognise its utility in solving real capital-raising challenges. These structures address practical needs: • They mitigate downside risk for commercial inves - tors. • They expand the investor base by accommodating multiple risk/return profiles. • They provide catalytic capital that helps attract larger institutional commitments.
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