The changing legal and regulatory context as asset managers scale up in private markets

^{Will Normand, Head of Asset Management, Travers Smith}

Travers Smith is an independent London-based law firm. It acts for publicly listed and private companies, financial services institutions, alternative asset managers, and other businesses on large and complex UK and cross-border matters, transactions, and disputes. 
 
Will Normand is Head of Asset Management at the firm, where he’s worked for 14 years. The practice advises on a wide range of products, with his particular focus on evergreen structures for alternative asset managers.  
 
Will talked with Shaun Beaney, Editor of Preqin First Close, about evergreen funds, AI governance, and manager consolidation.

What’s distinctive about the asset management team you lead at Travers Smith?

We’re fairly unique as an asset management team for a couple of reasons. We’re not a US-headquartered firm. We sit independently in London but service clients around the globe. Another very big point of difference is we provide a full-service offering for alternative asset managers, rather than just focussing on their fundraising requirements. We look after everyone, from the largest US East Coast, multi-strategy firms to spin-out emerging managers, and everyone in between in the mid-market, however widely defined.

How do you interact in asset management with your colleagues advising on M&A and buyout transactions?

Historically, you had a team advising the private equity house on fund formation, but when the fund was raised you handed over to the deal team. That has definitely changed over the years.  

Now, with the type of transactions we do, there is actually a huge amount of overlap, especially with multi-asset and single-asset continuation vehicles, liquidity options that are looked at in portfolios, fund transactions, and other structured solutions. Aspects of fund formation and corporate deal-making now essentially go into the same pot for the same deal in a number of cases. We work very closely with our colleagues on all aspects of that.

You help private equity managers diversify from institutional investors into wealth managers and private banks, for example. Why’s that important?

What we’re talking about is a wider range of options for people’s savings income and retirement income. Private markets are important in this respect because they are going to be the way a much broader range of people’s income and retirement savings are invested going forward. But they’re not for everyone. It’s important that this doesn’t go too wide and start creating problems because private markets are more complex products that are unsuitable for some people.

What are the broad legal principles for fund managers creating semi-liquid structures, such as European Long-Term Investment Fund (ELTIFs) and the UK’s Long-Term Asset Fund (LTAFs)?

The way to look at this is – what are you trying to achieve and for whom? These products provide a structure that’s more workable for privately invested wealth, as opposed to traditional closed-end funds in private equity, private credit, infrastructure, and real estate. 
 
What these evergreen structures provide instead of very significant minimum subscriptions that are committed upfront and drawn down over a two-year period are monthly, fully drawn dealings. You can subscribe every month when you want to in a way that all the capital you want to commit at that stage goes into the fund. That’s operationally a lot easier for wealth managers and private banks to deal with for their underlying client bases. Then those proceeds would largely go into the same assets as an institutional fund.  
 
Conversely, you’ve need to take account of how private wealth investors want to get their money out. They’re investing in fundamentally illiquid assets but there’s a built-in liquidity feature – albeit a limited one.

What about the potential risks for non-professional investors?

These products are not suitable for everyone. The reality is that none of the private markets managers are really going full retail. They’re typically partnering with private banks, wealth managers, and the like, to say, ‘You will act as our distribution partner to your underlying client base. It’s up to you as a regulated wealth manager – within the parameters we agree – to assess the suitability of this product for your clients and advise them accordingly.’  

Fund managers are partnering with institutions who understand their clients better than anyone and who can make suitability assessments. When you think about the legal and regulatory aspects, there are multiple layers designed into these products and how they are distributed, to try to make sure only the right investors are there.

How is digital innovation – including AI – affecting regulation of private markets?

In the UK, the Financial Conduct Authority has taken the view, reflected in its AI in financial services: good practice and areas for improvement guidance published last week, that its existing principles-based regulations work well for the use of AI by regulated firms at the moment. That is different to where the EU has gone with the AI Act, which is looking to specifically regulate the use of AI by Europe-headquartered, regulated managers. 

Under the current administration, the US is taking a more open view, so there's divergence across the globe. But I think countries that are not specifically regulating AI now are working on the basis that when we get nearer to a world in which agentic AI acts autonomously, they will probably need to look at regulation again.  
 
In the context of private capital firms, the key for us is to talk to our clients about the governance they are putting in place around AI use. How do you make sure that the right decisions and the right checks are still being made, and you’re not just essentially letting an AI make a continually self-fulfilling decision in terms of pointing your portfolio in a certain way? How do you get all the efficiencies, the benefits, and additional inputs that AI can give you, but still apply a tried-and-trusted thought process about what you’re doing? The point is to actively manage portfolios. They will be actively managed by individuals, and those individuals will of course be using AI. We all are.

What are you seeing in deals between asset managers – acquisitions, cross-investment, and financial institutions buying stakes in private markets managers?

Consolidation remains one of the key themes of the industry. There’s the scale of the very largest managers across multiple strategies, multiple geographies. They’ll say scale offers their clients opportunities that are unmatched as private markets reach the latest level of maturity. Equally, for those managers who might be acquisition targets, smaller firms now have an exit value, which wouldn’t necessarily have been the case a decade or more ago. 

Conversely, it gives other managers the ability to say ‘I’m going to make a virtue of my independence and my size’ to investors, to potential investee companies, and to their own people. If you wanted a more traditional carry model as a portfolio manager, you’d probably more likely find it now in one of the mid-market or smaller houses.  
 
There are two other linked issues. One is GP stakes – minority investments in fund managers. The GP stakes industry is becoming increasingly large. And then there are tie-ups between different asset managers to address market opportunities. The expansion of the private wealth investor base and evergreen funds has been an obvious driver for that.  
 
With asset classes, for those large managers that have multiple strategy offerings it’s about ‘How do I fill in the gap?’ and ‘If I've got a gap, do I want to buy in a manager to do it?’ It's that flight to scale. 

Shaun Beaney is Editor of Preqin First Close. It’s quick, easy, and free to subscribe here 

Preqin, a part of BlackRock, offers premier private markets performance data, with more than 140,000 transparent, customizable peer-group benchmarks and 65 reporting-grade indices, across $13tn-plus market capitalization coverage globally. We help investment professionals make confident decisions when identifying and evaluating new opportunities. 

Special thanks to Kate Hodgkinson at Travers Smith, and Isabelle Story at BlackRock.

_{The views expressed are the opinion of Travers Smith as of October 2026. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. Travers Smith is not affiliated with Preqin.}