Private Fund Insights Blog

On March 12, 2025, the Securities and Exchange Commission (SEC) issued a No-Action Letter (NAL) that clarified and expanded the definition of “reasonable steps” an issuer must take when making an offering under Rule 506(c). The new guidance increases the ability for small funds to raise capital and solicit investors by decreasing the administrative burdens previously applicable to Rule 506(c) offerings.

Background: SEC Rules 506(b) and 506(c)

Generally, under Section 5 of the Securities Act of 1933, any offers or sales of securities must be registered with the SEC unless an ...

Fund sponsors often engage investment banking or placement firms to help raise capital or generate deal flow for their funds. In exchange, the sponsor may offer a cash fee, a piece of the sponsor’s carried interest, equity in the applicable portfolio company, or some other form of compensation. Many sponsors and advisors are unaware that these activities can trigger broker-dealer registration requirements under federal and state law. The registration process is cumbersome and expensive, but the unregistered status of a firm that engages in such activities can create serious ...

Co-investments play an important role in alternative asset investments. A “co-investment” generally is a portfolio company investment made by an institutional investor, at its discretion, alongside a sponsor’s “blind pool” investment fund. This post describes some benefits and risks of co-investments, both to investors and sponsors, and some of the commonly negotiated terms.

Co-investments offer several advantages to institutional investors compared to traditional fund investments. Sponsors often charge reduced management fees and carried interest, if ...

The short answer is no. A private investment fund (whether a venture capital fund, private credit fund, private equity fund, hedge fund, fund-of-funds or other type of non-registered fund) is not legally required to have a private placement memorandum or other offering document. Producing a high-quality PPM takes a material amount of time, work and money for a fund sponsor, many of whom are eager to avoid the exercise to focus efforts and resources on other matters. Whether a sponsor must or should prepare a PPM is driven mainly by the expectations and requirements of the potential fund ...