The private funds sector is experiencing changes in 2026 as limited partners (LPs) are taking a more active role in shaping fund structures and emphasizing liquidity options. These developments are influencing how managers and investors approach fund design and capital allocation.
Cooley’s recent analysis indicates that since 2020, the firm has advised on over 300 LP commitments across 15 LP jurisdictions and 12 general partner (GP) jurisdictions. Delaware remains the most common fund domicile, accounting for about 57% of target funds handled by Cooley, followed by the Cayman Islands at 24%. Other locations include Luxembourg, Singapore, the UK, Australia, Hong Kong, and additional markets. This trend suggests that LPs are becoming more comfortable with cross-border investments and that geopolitical uncertainties are less likely to deter their decisions regarding fund jurisdiction.
Large sovereign investors and strategic LPs now play a significant role in designing fund structures. Instead of accepting standard vehicles, they often seek customized solutions such as separately managed accounts (“fund of one”), tailored vehicles, or permanent capital structures to fit specific investment mandates. In Asia, for instance, there is an increase in requests for bespoke fund arrangements that match internal policies, governance standards, economic terms, and liquidity needs.
Liquidity is now a central consideration for many investors. In 2025, allocations expanded into secondary opportunities and private credit funds. There was also greater interest in structured products that combine venture capital with private equity or hedge strategies. Although closed-end funds remain important, they now face competition from credit-focused products, secondaries, and hybrid offerings.
Tools such as continuation vehicles, net asset value (NAV) facilities, and structured secondary products have become prominent topics during initial negotiations between managers and LPs. Investors want clear information on when these tools will be used, how potential conflicts will be addressed, and what protections are included in the fund agreements.
These observations reflect current market trends identified by Cooley. The firm invites interested parties to discuss these findings further or explore their implications for fundraising or investment strategy.
The content provided is intended solely for general informational purposes and does not establish an attorney-client relationship with Cooley LLP or any related entity. It should not be considered legal advice nor replace consultation with qualified legal counsel.