Davis Polk partners Chris Healey and Greg Rowland were quoted in FundFire discussing the SEC’s recent move to relax a staff position that limited interval funds from investing more than 15% of their assets in private funds to accredited investors.

Greg noted that at least one recent filing for a new interval fund from J.P. Morgan Asset Management had appeared to make an early bid to proceed without an accredited investor requirement. “The J.P. Morgan Credit Markets Fund, in its initial Form N-2 filing in February, listed no mention of an accredited investor limitation in a section where managers would normally cite it,” he said.

“The J.P. Morgan filing was the first to really push the envelope further,” he added.

At an SEC forum in May 2025, Chairman Paul Atkins and Director of the SEC’s Division of Investment Management Natasha Greiner mentioned reviewing and potentially stepping back from the staff position.

“In the weeks since Atkins and Greiner spoke, other managers have discussed making their own moves,” Greg said. “We represent a number of registered funds of funds that are currently subject to the limitation that are actively interested in [exploring how] they could use this to expand their investor base.”

“These events should not be a surprise to the market, as the SEC has been telegraphing its intentions,” said Chris. “Anybody who had been paying attention was aware that those conversations had been happening.”

“SEC Lifts Accredited Investor Limit on Two Cliffwater Interval Funds,” FundFire (June 3, 2025) (subscription required)

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