Davis Polk partner Chris Healey was featured in an Ignites video interview discussing the legal obligations registered investment advisors have as they expand private market access. 

Discussing the retailization of these private markets, Chris said, “One thing that many of the product manufacturers or sponsors would like to see is a move into allowing privately offered products to do general solicitation under what we call 506(c). There are a lot of retail investors who are accredited, and that’s… an area where the allocation of responsibilities and risks and potential liability remains to be solved.”

“As a general matter, there’s not a whole lot of difference between the basic framework of the regulatory responsibilities and obligations that you have versus a mutual fund when you’re talking about a private markets fund,” he added. “I think what you see more is concerns around the risks of the assets.”

Speaking about appropriate checks and balances, Chris noted, “We should be setting up a regime that allows the freedom and flexibility for product development and investor choice… It would be nice for the industry and investors to figure out what they think is the best product without the regulators imposing a particular wrapper or limitations on wrapper on that.”

He continued, “I do think it’s really only appropriate for investors to access these types of products through a properly structured, regulated fund as opposed to letting them invest purely in private funds. …  The ‘40 Act fund wrapper of whatever type – whether it’s target-date funds, interval funds, listed funds – feels like the right basic starting point for investors to access this, where you have a fiduciary who’s a registered investment advisor. You have review by the SEC. You have disclosure examination by the SEC, all of the investor protections of the 40 Act. That’s a really good place to start.

“Who Bears the Risk? Legal Lines Blur in Private Markets Expansion,” Ignites (March 3, 2026) (subscription required)

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