Over the past few weeks, we’ve shared several updates about the evolving regulatory landscape around fund marketing, particularly the SEC’s recent no-action letter on Rule 506(c) and its updated guidance on performance presentation under the Marketing Rule FAQs. We’ve received significant interest and questions from fund managers, so we’re consolidating the key takeaways here. This post outlines what has changed, what it means for GPs, and how AnchorPoint can support more effective and compliant marketing efforts.

In today’s private markets landscape, raising a traditional commingled fund has become increasingly difficult. Institutional LPs remain cautious, fundraising timelines are extended, and first-time fund managers are facing a higher bar than ever to secure commitments. Yet, market dislocations are creating compelling opportunities for those who can move fast and creatively. In this environment, many emerging managers and entrepreneurial investors are turning to alternative fund structures that provide flexibility, reduce upfront costs and allow capital to be deployed quickly.

The SEC’s recent no-action letter has made Rule 506(c) a more attractive alternative to Rule 506(b). While 506(c) has always been available, many fund managers have preferred 506(b) due to the burdensome investor verification requirements. The recent no-action letter has eased compliance by providing limited flexibility in accredited investor verification, particularly when a minimum investment threshold is met. This change makes it easier for investor relations teams to actively market their funds and allows emerging fund managers to reach a broader audience without relying on costly placement agents. However, just because fund managers can market their funds more freely doesn’t mean they can do so without restrictions. While Rule 506(c) provides more flexibility in how fund managers solicit investors, they must still adhere to SEC regulations to remain compliant.

Management fees in traditional closed-end funds follow a standard structure but include important nuances that emerging managers should understand. While they may seem like a simple calculation of commitments multiplied by the fee rate, the structure can vary significantly based on fund strategy, lifecycle stage and additional offsets.

In a challenging fundraising environment, closing a private equity (PE) fund efficiently requires strategic incentives, clear deadlines, and strong investor communication. From what we have witnessed, the most savvy fund managers, i.e., those who have closed funds in record time, consistently implement certain key strategies to maintain momentum and avoid unnecessary delays. Given the current market slowdown, we believe it is especially useful to share these insights we have experienced from savvy fund managers.

Starting a fund is a bold and exciting endeavor, but one of the critical challenges many aspiring fund managers face is leveraging their track record from a current or one or more previous employers. A track record is more than just a list of past achievements; it is a vital tool for attracting investors and establishing credibility. Given the recent challenges in fundraising where most of the capital is going to established players in the industry, a strong track record can be the deciding factor in successfully raising capital.