Institutional Investor Newsletter

1. Looking ahead at key trends in 2026 

In 2026, evergreen funds are expected to rise further and the broadening of access to public markets will likely continue. Additionally, amid ongoing prevalence of liquidity solutions outside "traditional" exits, mergers and acquisitions dealmaking may bounce back. Despite increased positivity on exits, limited partners (LPs) will likely continue to sell fund interests on the secondary market at pace to gain liquidity and balance portfolios. Lastly, regulators are expected to continue focusing on valuations and liquidity.

2. AIFMD II approaching implementation

The deadline for implementation of Alternative Investment Fund Managers Directive (AIFMD) II is April 16, 2026. AIFMD II includes changes on liquidity risk management, disclosures and reporting, marketing, and new rules for loan originating funds, in particular. Loan originating funds may see some updates to reflect changes in connection with diversification, risk retention, and leverage limits, unless grandfathering applies. Investors are expected to receive improved reporting in 2027.

3. Fund governance under increased scrutiny from investors

As structures involving asset value facilities, continuation vehicles, co-investments, and general partnership (GP) stakes grow more complex, investors are scrutinizing them more rigorously to ensure that sponsors have robust governance and sufficient transparency in place. In addition to a focus on detailed terms, investors are stepping back to assess the discretion afforded to sponsors under some of these mechanics more broadly, in the context of competing stakeholder interests.

4. ILPA releases its new disclosure template to streamline GP–LP continuation fund engagement

The Institutional Limited Partners Association (ILPA) has released its new continuation fund disclosure template in light of the ongoing acceleration of continuation vehicles (almost 20 percent of all exits in 2025 were reportedly by way of continuation vehicles). The disclosure template supplements the continuation fund guidance published in 2023 and aims to put a standardized framework in place for the high-level information LPs should typically receive during the continuation vehicle process. The template covers information on the asset, transaction process, continuation vehicle return profile, and terms of the continuation fund.