Liquid Claims on Illiquid Assets: Looming Litigation Issues as Historically Private Asset Classes Move Into the Retail Market

A wave of redemptions and asset markdowns at private credit funds has dominated news in capital markets in early 2026. This turmoil comes just months after the U.S. administration signaled a willingness to open a new frontier for private capital: allowing the $14 trillion defined-contribution retirement market to invest in the sector.  Against this backdrop, the program examines the economics and legal risks of two specific vehicles at the center of this expansion: interval funds and tender offer funds. These SEC-registered structures attempt to wrap illiquid private assets in a liquid shell, creating inherent tensions around valuation, redemption management, and investor protection. Drawing on a comprehensive dataset of registered funds, the presenters will walk through the empirical evidence on the cost of the retail wrapper, including fee structures, liquidity buffers that funds must maintain to meet repurchase obligations, and asset selection constraints.

The program will also address potential conflicts of interest embedded in these structures: co-investment allocation between retail and institutional vehicles; weak incentive alignment (less than 20% of funds report incentive compensation); and NAV staleness, which can create potential wealth transfers between entering and exiting investors. These issues carry direct implications for disclosure adequacy, regulatory compliance, and fiduciary obligations.  The program will also examine recent litigation developments and trends, including the potential risks associated with expanding the investor base in this market to investors more likely to pursue litigation and claims relating to such disclosure and applicable duties.  

The program will benefit experienced capital markets litigators as well as counsel focused on private fund regulatory and compliance matters.

Learning Objectives: 

1. Learn details of certain new structures designed to wrap inherently illiquid assets in an apparently liquid shell

2. Analyze the structural tensions from wrapping illiquid private assets in a liquid, SEC-registered shell, including valuation challenges, redemption pressure, and cash buffer drag

3. Evaluate the economic costs of retail access by decomposing the performance gap into compressible components (fees) and structural components (liquidity buffers, asset selection constraints)

4. Assess potential conflicts of interest in these new fund structures, including NAV staleness and wealth transfers, co-investment allocation between retail and institutional vehicles, and weak incentive alignment relative to traditional drawdown funds

5. Apply empirical evidence on fund performance, redemption demand, and asset selection to evaluate disclosure adequacy and investor protection concerns