Key Takeaways
- • Regulatory scrutiny on private funds persists despite potential SEC priority shifts, with recent enforcement actions signaling continued oversight of manager compliance and operational practices, according to McDermott Will & Schulte partner Marc Elovitz.
- • Private equity deal activity demonstrated recovery momentum in 2025, with Q3 marking the busiest quarter since early 2020, indicating transactional improvement across the sector despite regulatory headwinds.
- • Compliance landscape complexity requires proactive management, as private fund managers must navigate evolving regulatory expectations across SEC priorities, enforcement trends, and fund formation requirements.
- • McDermott Will & Schulte's expanded private equity practice reflects institutional demand, with the firm adding senior talent and positioning itself to support managers through regulatory and transactional challenges.
Summary
Private funds continue to face substantial regulatory pressure from the SEC, even as enforcement priorities may be shifting in focus. According to Marc Elovitz of McDermott Will & Schulte, recent enforcement actions demonstrate that regulators remain committed to scrutinizing private fund managers across compliance, operational, and disclosure dimensions. The regulatory environment remains dynamic, requiring managers to stay informed about evolving enforcement patterns and policy priorities.
Despite regulatory headwinds, the private equity market showed meaningful recovery throughout 2025. Deal activity improved notably, with Q3 2025 representing the busiest quarter for private equity transactions since early 2020. This recovery signals that institutional investors and sponsors remain active in deploying capital, though they continue to operate within a more stringent compliance and regulatory framework than in prior market cycles.
The Private Fund Compliance Regulatory Forum has emerged as a key venue for discussions about navigating the compliance landscape. Participants explored strategies for staying ahead of regulatory developments and maintaining operational compliance amid shifting SEC priorities. For managers, this requires both reactive responses to enforcement actions and proactive positioning to anticipate regulatory changes.
McDermott Will & Schulte's expansion of its private equity practice, including the addition of senior talent from competing firms, reflects sustained institutional demand for specialized legal guidance on fund formation, compliance, and transactions. The firm's fund finance team serves private equity funds, credit funds, hedge funds, real estate funds, and funds-of-funds, underscoring the breadth of challenges facing alternative asset managers across multiple fund types. As the regulatory environment continues to evolve, sophisticated legal counsel remains essential for navigating both current compliance requirements and emerging regulatory expectations.
Despite regulatory headwinds, the private equity market showed meaningful recovery throughout 2025. Deal activity improved notably, with Q3 2025 representing the busiest quarter for private equity transactions since early 2020. This recovery signals that institutional investors and sponsors remain active in deploying capital, though they continue to operate within a more stringent compliance and regulatory framework than in prior market cycles.
The Private Fund Compliance Regulatory Forum has emerged as a key venue for discussions about navigating the compliance landscape. Participants explored strategies for staying ahead of regulatory developments and maintaining operational compliance amid shifting SEC priorities. For managers, this requires both reactive responses to enforcement actions and proactive positioning to anticipate regulatory changes.
McDermott Will & Schulte's expansion of its private equity practice, including the addition of senior talent from competing firms, reflects sustained institutional demand for specialized legal guidance on fund formation, compliance, and transactions. The firm's fund finance team serves private equity funds, credit funds, hedge funds, real estate funds, and funds-of-funds, underscoring the breadth of challenges facing alternative asset managers across multiple fund types. As the regulatory environment continues to evolve, sophisticated legal counsel remains essential for navigating both current compliance requirements and emerging regulatory expectations.
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