Governance-by-Design for Private Markets: From Funds to Platforms

As managers have evolved from managing individual fund vehicles to operating multi-strategy platforms — managing the same underlying loans and assets across direct lending funds, evergreen structures, SMAs and co-investment vehicles simultaneously — the contractual and fiduciary architecture designed around single fund structures has become increasingly stretched.

The article addresses three situations that every private credit investment professional and in-house counsel will recognize. First, loan management extensions: when the same manager holds a deteriorating position across multiple vehicles — potentially at different valuations — who is making the extension decision, under what authority and how are the competing interests of different investor groups documented and resolved? Second, evergreen and semi-liquid structures: as retail and wealth capital continues to be captured by the asset class alongside institutional LP capital, the operation of liquidity windows, gates and NAV calculations becomes a platform-level question, not a fund-level one. Third, GP-led continuation vehicles: the structural conflict between the manager acting for the selling fund and the manager acting for the continuation vehicle buyer is well understood — less well understood is how that conflict is managed when multiple vehicles on the same platform are affected concurrently.

The article suggests five key questions that a private credit manager should ask themselves with respect to their current governance framework: whether (and how) decision authority at platform level is documented; whether fiduciary obligations across vehicles have been adequately mapped and analyzed; whether investor consent mechanisms have been properly designed; whether valuation and liquidity policies are coherent across vehicles; and whether the basis for platform-level decisions could be reconstructed and explained to a regulator, an investor or a court. These are not abstract governance questions — they are the questions that arise in every loan workout, liquidity event and secondary transaction, and the article sets out a structured framework for addressing these issues before they become problems.

Should a manager have identified gaps in their governance framework, the article suggests a roadmap to help formulate platform-level decision-making, identify where governance may need to evolve and how the coherence and defensibility of decisions across vehicles and investor groups can be strengthene.