First-Half 2025 Review: Evolving Trends in Fund Formation

First-Half 2025 Review: Continued Growth and Evolving Trends in Fund Formation

As we reach the midpoint of 2025, we’re proud to reflect on another strong six months of helping emerging fund managers bring their strategies to life. From long-short equity and derivatives to private credit and digital assets, we continue to form and launch several funds each month on behalf of our clients. A particular highlight this year has been our successful expansion into real estate fund formation—a natural extension of our expertise.

Expanding into Real Estate Fund Formation

Historically, our focus has been on hedge funds and private equity funds. However, the growing demand from real estate managers seeking a more efficient and scalable fundraising model has led us to broaden our scope. We’re now actively supporting the launch of real estate funds that provide recurring access to investor capital, reducing the reliance on one-off syndication rounds and offering fund managers a more consistent capital base.

Regulatory Developments: 506(c) Gains Momentum

One of the most notable developments in the first half of the year was the SEC’s No-Action Letter issued on March 12, 2025. The guidance clarified what constitutes “reasonable steps” to verify accredited investor status under Rule 506(c) of Regulation D. Specifically, it confirmed that issuers can satisfy verification requirements by relying on minimum investment thresholds—generally $200,000 for natural persons and $1 million for legal entities—combined with written investor representations.

This shift has prompted a growing number of fund managers to consider launching 506(c) funds that permit general solicitation, while still meeting compliance standards. The result is a more streamlined investor onboarding process and expanded access to capital.

Growth in Digital Assets and Crypto Derivatives

Interest in digital asset funds remains strong. We’ve seen continued momentum not only in crypto-focused strategies but also in hybrid hedge funds that incorporate cryptocurrency exposure alongside public equities. Additionally, the rise in yield opportunities across DeFi protocols has driven a surge in cryptocurrency derivatives, now becoming a core component of several hedge fund strategies we support.

RIAs Launching Proprietary Funds

Registered Investment Advisers (RIAs) with established wealth management practices are increasingly launching their own private funds. By doing so, they’re able to offer clients direct access to proprietary trading strategies or unique deal flow within a fund structure. We’ve worked closely with several RIAs this year to navigate the formation process, from regulatory filings to offering documents, ensuring their fund launches are both compliant and tailored to their clients’ needs.

Evolution of Real Estate Syndication

We’re also seeing real estate sponsors—many of whom previously raised capital on a deal-by-deal basis—shift toward launching dedicated real estate funds. This evolution offers several advantages: greater predictability in capital availability, streamlined fundraising for each acquisition, and a tighter investor base. These funds act as a consistent source of equity, with syndicate offerings filling out the remainder of each round on a more selective basis.

Looking Ahead

As we move into the second half of 2025, we remain focused on helping fund managers structure and launch vehicles that are not only compliant but also positioned for long-term success. Whether you’re considering a hedge fund, private credit, private equity, or real estate fund, our experienced team is here to help.

If you’d like to discuss launching your fund, we’d love to hear from you.