SEC Staff Opens Door to Expanded Retail Access to Private Funds

May 22, 2025

Key Takeaways

The SEC staff has stated that it will no longer issue comments on registration statements seeking to limit the sale of registered closed-end funds that invest significantly in private funds to accredited investors who are investing at least $25,000.
The historical policy has served as a longstanding barrier to giving retail investors access to professionally managed closed-end funds that invest in private funds.

On May 20, 2025, SEC Director of Investment Management Natasha Vij Greiner stated that the SEC staff will no longer provide comments during the registration statement review process seeking to limit the ability of retail investors to invest in registered closed-end funds that invest more than 15% of their net assets in underlying private funds.¹ As Director Greiner explained, “this decision was made based on the ever evolving industry,” and the SEC staff “hope[s] this shift will provide investors with new investment opportunities to the extent they align with their risk tolerance and investment objectives.” Director Greiner’s statement follows a speech by SEC Chairman Paul Atkins on May 19, 2025, during which he called for the SEC to expand retail access to private markets and promote innovation. Chairman Atkins acknowledged that a change in policy could “give all investors the ability to seek exposure to a growing and important asset class, while still providing the investor protections afforded to registered funds.”²

Prior to Director Greiner’s announcement, the SEC staff had held a longstanding policy of requiring closed-end funds that invest more than 15% of their net assets in underlying private funds to restrict sales to investors that satisfy the accredited investor standard and impose a minimum initial investment requirement of $25,000. Consistent with this policy, the SEC staff would not grant acceleration of a closed-end fund’s registration statement without a commitment by the fund to impose these restrictions during the disclosure comment process. Director Greiner reserved the possibility that the SEC staff may comment in the future on disclosures concerning conflicts of interest, liquidity and fees, but she did not provide details.

We expect that this development will be an important step in allowing investors to access private investment strategies while also facilitating a more streamlined process for offering these types of funds.