Duncan K. R. McKay

Gibson Dunn announced today that Blake Estes has joined the firm’s New York office as a partner in its preeminent Investment Funds Practice Group. Blake advises asset managers and broker-dealers through all aspects of the structuring, development and distribution of retail investment products, including interval funds, tender offer funds, Business Development Companies (BDCs), and Real Estate Investment Trusts (REITs).~~“Blake’s impressive experience with retail investment products, including registered funds, combined with his in-house and private practice background, further strengthens our Investment Funds Practice Group,” said Shukie Grossman, Global Chair of the Investment Funds Practice Group. “As the retailization of private capital markets continues, Blake’s arrival complements our private credit, private equity, and real estate practices and supports the multidimensional needs of our clients.”~~“I’m excited to join Gibson Dunn and grow my practice on the firm’s investment funds platform alongside a team known for its incredible bench strength, market knowledge, and collaborative, client-focused approach,” said Blake. “Alternative asset managers are increasingly focused on accessing retail and mass-affluent capital, and I look forward to helping clients navigate the complex structuring, compliance, and operational challenges associated with the rapid growth of evergreen capital vehicles sold through private wealth distribution channels.”~~Gibson Dunn’s Investment Funds Practice Group is a top-tier practice advising sponsors across geographies, asset classes, and fund structures. With a deep bench and extensive experience, the team~~provides the full scope of fund services needed to navigate the challenges and opportunities facing investment fund managers in today’s market. From fund formation to fund servicing to fund finance, and tax planning, complex secondaries, management company transactions, and regulatory and compliance matters, the team delivers top-of-the-market knowledge and senior-level, commercial counsel across the lifecycle of a fund. The practice has continued to expand to deliver integrated, full-service support to clients, most recently welcoming Marian Fowler in Washington, D.C., Duncan McKay in New York, James O’Donnell and Hannah Watson Fanin in London, and Carolyn Abram in Dubai.~~About Blake Estes~~Blake’s practice is focused on retail investment products structured for distribution to noninstitutional investors, primarily through wirehouse wealth management platforms and independent RIA networks. He represents sponsors and distributors of interval funds, tender offer funds, BDCs and REITs, among other retail-focused products. He focuses on product structuring, compliance, operations, fundraising, and distribution within complex regulatory frameworks.~~Prior to joining Gibson Dunn, Blake served as a partner at an international law firm and General Counsel at CION Investments, an early sponsor of retail alternatives products.~~Download PDF~~

Jan 26

2 min

Covered “venture capital companies” must register with the DFPI beginning March 1, 2026, and, by April 1, 2026, must submit an annual report covering in-scope activity for 2025.~~California’s venture capital founder diversity reporting regime, the California Fair Investment Practices by Venture Capital Companies Law (FIPVCC) [1], as discussed in our prior client alert, is moving into its first reporting cycle, now administered by the California Department of Financial Protection and Innovation (DFPI). Covered “venture capital companies” must register with the DFPI here beginning March 1, 2026, and, by April 1, 2026, must submit an annual report covering in-scope activity for 2025.~~The below decision tree sets forth how to determine if the FIPVCC’s reporting requirements apply to an entity.~~Covered Entities Subject to the Reporting Requirements~~Chart Footnotes~~A. The California Code’s definition of a “Venture Capital Company” is complex, and whether an entity will be considered a VCC merits a case-by-case analysis. In simple terms, an entity generally will be a VCC in California if it is: (i) a “Venture Capital Fund” as defined by the SEC, meaning it is a private fund that (1) holds itself out to investors as pursuing a venture capital strategy, (2) holds no more than 20% of the fund’s commitments in non-qualifying investments, including non-convertible debt, secondaries, public issuances, other private or registered funds, certain digital assets, or leveraged buyouts, (3) does not borrow or otherwise incur leverage in excess of 15% of the fund’s commitments, and then only on a short-term basis, and (4) limits investor redemption rights to “extraordinary circumstances”; (ii) a “Venture Capital Operating Company” as defined by the Department of Labor, meaning 50% of fund assets (valued at cost) must be invested in operating companies or derivative investments in which the fund has direct contractual management rights and the fund must exercise such management rights with respect to at least one portfolio company; or (iii) if 50% or more of the entity’s assets are “Venture Capital Investments” or related derivatives per Section 260.204.9 of the California Code at any time in a given reportable year. “Venture Capital Investment” means an acquisition of securities in an operating company as to which the investment adviser, the entity advised by the investment adviser, or an affiliated person of either has or obtains management rights, or the right to substantially participate in, to substantially influence the conduct of, or to provide (or to offer to provide) significant guidance and counsel concerning, the management, operations or business objectives of the operating company in which the venture capital investment is made.~~B. No guidance or cross-reference has been given regarding the definitions of “primarily engage,” “early-stage” or “emerging growth companies” under the FIPVCC.~~C. No guidance or cross-reference has been given regarding what constitutes a “significant presence” in California under the FIPVCC, and sponsors will need to make a subjective determination regarding the same.~~D. See footnote [A] for the definition of Venture Capital Investment. No guidance or cross-reference was given regarding what constitutes “significant operations in California” under the FIPVCC, and sponsors will need to make a subjective determination regarding the same.~~Reporting Requirements~~Under the FIPVCC, covered entities are required to provide portfolio companies the opportunity to provide demographic data on a prescribed form, and then make annual reports to the DFPI with respect to portfolio companies in which they have made venture capital investments over the prior calendar year on the (i) founding team demographics of their portfolio companies and (ii) investments each covered entity makes in portfolio companies with diverse founding teams. “Founding team members” include any individual designated as the chief executive officer or president, as well as individuals who: (A) owned initial shares or similar ownership interests of the business; (B) contributed to the concept of, research for, development of, or work performed by the business before initial shares were issued; and (C) were not passive investors in the business.~~In connection with a new venture capital investment, a covered entity must provide founding team members with the DFPI survey after execution of the investment agreement and the first transfer of funds. Participation in the survey is voluntary, and covered entities may not encourage, incentivize, or influence participation; declines and non-responses must be included in the aggregate results.~~Demographic data of portfolio company founding teams that must be reported under the FIPVCC on an aggregated and anonymized basis, to the extent it was provided by the covered entity, includes:~~Investments made in the prior calendar year in portfolio companies with diverse founding teams must also be reported as a percentage of the covered entity’s aggregate venture capital investments. The FIPVCC requires both aggregate reporting and categorical reports for each enumerated group above. Additionally, the covered entity must report the dollar amount of its venture capital investments for the prior calendar year and the principal place of business of each portfolio company. Once an entity is determined to be subject to FIPVCC reporting, the information must be provided with respect to all portfolio companies in which venture capital investments were made, regardless of whether the portfolio company has a California nexus. The FIPVCC allows the DFPI to publish this anonymized information online and collect fees for the administration of the FIPVCC, which are currently set at $175 per report.~~Consequences of Non-Compliance~~The DFPI will notify any covered entity that fails to comply with the registration or reporting requirements and will provide a 60-day period to cure the noncompliance. If the deficiency is not remedied within that time, the firm may be subject to penalties of up to $5,000 per day, in addition to the required filing fees, with the potential for higher penalties for reckless or knowing violations.~~Manager-Level Reporting~~The FIPVCC suggests that a sponsor that controls multiple covered entities may be permitted to submit a single, consolidated report on behalf of all its controlled funds. This may simplify the reporting process for larger platforms. However, final guidance on the mechanics and eligibility for consolidated reporting has not yet been issued. Firms considering this option should be prepared to submit reports on a fund-by-fund basis if required.~~Recordkeeping~~The FIPVCC specifically requires that all records related to compliance – including survey responses, aggregated demographic data, investment records, and annual reports – be retained for a minimum of five years from the date of filing each annual report. Covered entities should ensure that their recordkeeping systems are designed to meet this five-year retention period and that records are readily accessible in the event of a DFPI examination or request. Data should be stored securely and access should be limited to authorized personnel to protect the privacy of founding team members.~~Industry Developments~~Industry groups, including the National Venture Capital Association, have requested that the DFPI delay the initial compliance deadline to allow firms more time to implement the necessary data collection and reporting systems. As of the date of this alert, the deadlines remain in effect. Firms should monitor DFPI announcements for any updates.~~Next Steps for Covered Firms~~In light of the upcoming April 1, 2026 deadline, covered firms should consider taking the following actions:~~[1] Senate Bill 54, Ch. 594, 8 October 2023 available here.~~The following Gibson Dunn lawyer prepared this update: Kevin Bettsteller.~~Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the issues and considerations discussed above. Please contact the Gibson Dunn lawyer with whom you usually work, the author, or any of the following leaders and members of the firm’s Investment Funds practice group:~~Carolyn Abram – Dubai (+971 4 318 4647, cabram@gibsondunn.com) Kevin Bettsteller – Los Angeles (+1 310.552.8566, kbettsteller@gibsondunn.com) Albert S. Cho – Hong Kong (+852 2214 3811, acho@gibsondunn.com) Candice S. Choh – Los Angeles (+1 310.552.8658, cchoh@gibsondunn.com) Shannon Errico – New York (+1 212.351.2448, serrico@gibsondunn.com) Blake E. Estes – New York (+1 332.253.7778, bestes@gibsondunn.com) Marian Fowler – Washington, D.C. (+1 202.955.8525, mfowler@gibsondunn.com) A.J. Frey – Washington, D.C./New York (+1 202.887.3793, afrey@gibsondunn.com) Shukie Grossman – New York (+1 212.351.2369, sgrossman@gibsondunn.com) James M. Hays – Houston (+1 346.718.6642, jhays@gibsondunn.com) Kira Idoko – New York (+1 212.351.3951, kidoko@gibsondunn.com) Duncan K. R. McKay – New York (+1 212.351.2603, dmckay@gibsondunn.com) Gregory Merz – Washington, D.C. (+1 202.887.3637, gmerz@gibsondunn.com) Eve Mrozek – New York (+1 212.351.4053, emrozek@gibsondunn.com) James O’Donnell – London (+44 20 7071 4261, jodonnell@gibsondunn.com) Roger D. Singer – New York (+1 212.351.3888, rsinger@gibsondunn.com) Edward D. Sopher – New York (+1 212.351.3918, esopher@gibsondunn.com) C. William Thomas, Jr. – Washington, D.C. (+1 202.887.3735, wthomas@gibsondunn.com) Kate Timmerman – New York (+1 212.351.2628, ktimmerman@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Feb 26

7 min

Gibson Dunn’s market-leading Fund Finance & Structured Capital team participated in panel discussions and contributed to conversations on the evolution of fund finance and private credit markets.~~The Fund Finance Association held its 15th Annual Global Fund Finance Symposium on February 2–4, 2026, in Miami, bringing together nearly 3,000 professionals from across the fund finance market, including fund managers, lenders, investors, and lawyers. As a platinum sponsor of the event, Gibson Dunn’s market-leading Fund Finance & Structured Capital team participated in panel discussions and contributed to conversations on the evolution of fund finance and private credit markets. Below is a summary of our key takeaways from the symposium and our outlook for fund finance in 2026.~~Market Outlook~~We anticipate another year of significant growth and innovation in the fund finance industry, with sponsors and lenders drawing on an increasingly diverse set of financing structures and liquidity solutions to meet their strategic objectives. Both NAV facilities and subscription lines will remain widely used, as the market continues to accommodate lenders with varying risk profiles—from those favoring the relative security of unfunded capital commitments to those comfortable lending against portfolio assets—and as funds invest across an increasingly broad range of asset classes. We also anticipate continued innovation in deal structures, including an increase in hybrid facilities, greater use of securitizations and rated structures, and more frequent tranching of debt into different classes to accommodate varied investor preferences.~~The Proliferation of NAV Financing~~Net asset value (NAV) financings have become a well-established liquidity tool for fund sponsors, and this growth is expected to continue throughout 2026. Sponsors are increasingly utilizing NAV-based solutions to support existing portfolio investments, pursue new opportunities, enhance net returns, and refinance maturing subscription lines. NAV facilities have also become particularly important for evergreen fund structures, where traditional subscription facilities may be unavailable due to the absence of unfunded capital commitments and the presence of investor redemption features. We are also seeing increased use of NAV and hybrid financing solutions for separately managed accounts (SMAs) and continuation vehicles. We expect to see additional non-bank lenders entering the market and offering liquidity solutions, as fund managers themselves increasingly become providers of fund finance products.~~Investor attitudes toward NAV financing have evolved considerably. Transparency, market education, and ILPA guidance have helped normalize NAV financing across strategies. Looking ahead, we expect to see the use of NAV and hybrid facilities continue to accelerate, driven by growing investor acceptance and the increasing participation of private credit funds and insurance companies as lenders in these transactions.~~Continuation Vehicles as a Liquidity Management Tool~~Continuation vehicle (CV) transactions represent a significant volume of GP-led secondary transactions, accounting for approximately 50% of the market in 2025. A CV gives investors in an existing fund the opportunity to invest in a new fund with one or more of the existing fund’s assets, rather than requiring an exit or liquidity event. The uptake has been accelerated by a challenging M&A environment and depressed exit returns, as well as growing recognition that a typical four-to-six-year investment period may not provide sufficient time to fully realize value from a fund’s asset or assets.~~CVs represent a structural shift: fund managers have grown comfortable with the idea that they need not sell investments in a sponsor-to-sponsor transaction to extract value. Instead, utilizing a CV can drive the next wave of growth and investment in an asset while also providing existing fund investors with an option for liquidity. Financings for CVs are often structured as hybrid facilities, involving subscription facility components along with enhanced covenants such as asset coverage ratios and security over distributions from the underlying asset or assets.~~The Growth of GP Financings~~GP-level financings have become a well-established and growing segment of the fund finance market, with continued expansion expected in 2026 across sponsors of all sizes. These facilities allow general partners to address working capital needs and manage capital allocation by borrowing against predictable revenue streams. Lenders are developing customized financing solutions that may segment different income streams—such as management fees, performance-based compensation, and GP commitment obligations—into distinct tranches with tailored terms. As GP balance sheets become more sophisticated and capital needs more varied, we expect continued product innovation in this space.~~Back-Leverage and Single-Asset Financing~~Back-leverage transactions and single-asset financing solutions are gaining significant traction in the fund finance market. These structures allow sponsors to obtain financing at the asset level, often serving as interim capital ahead of a planned exit or to fund additional investment in a particular portfolio company. As sponsors seek more targeted liquidity solutions that do not require fund-level borrowing, back-leverage facilities offer flexibility and can be structured to align with specific asset timelines and value creation plans.~~Rise of Insurance Capital and Private Wealth Investors~~The influence of insurance companies in the fund finance space is likely to continue growing as insurers seek exposure to alternative investments. As lenders, insurance companies’ long-duration capital allows them to offer more dynamic and flexible structuring options, access to alternative pools of capital, and potential pricing advantages for borrowers.~~This past year also saw an increase in private wealth and family office investors, with general partners developing products tailored to individual investors. We expect the “retail-ization” of alternative investments to become an increasing focus as fund managers adopt new technologies to capture retail capital and “Defined Contribution” dollars as the 401(k) industry opens up to allocations in alternative investments.~~Increased Use of Structured Products and Ratings~~There has been a notable increase in rated note feeder (RNF) and collateralized fund obligation (CFO) transactions as insurers and fixed income investors seek exposure to private capital and more sponsors utilize these structures as fundraising and balance sheet tools. KBRA reported a record year in 2025 for CFO transactions, representing $26.2 billion across more than 20 transactions.~~The recent expansion of CFO and RNF structured products is partially driven by increased involvement of rating agencies. The rating process brings discipline, greater standardization, and transparency, which in turn bolsters investor confidence. Investment grade outcomes depend heavily on leverage levels, diversification, and manager quality. CFO and RNF products offer flexible structuring, varied risk profiles, exposure to diverse assets, and predictable cash flows—making them attractive to a range of investors. Notably, the CFO transaction is perhaps better understood as a hybrid between a fundraising tool and a GP liquidity solution. As these products mature, they are transitioning from novel structures to established components of the fund finance toolkit. We also anticipate that the use of ratings will expand beyond NAV and CFO transactions to include a wider array of fund finance products, opening access to new pools of institutional capital.~~Looking Ahead~~The symposium provided a valuable opportunity to connect with colleagues, clients, and key players across the fund finance ecosystem. The prevailing sentiment reflected optimism about the fund finance market and the outlook for 2026. We expect continued growth and evolution of financing and fund structures, with expanded use cases for NAV financing, structured capital products, and other strategic liquidity solutions. Gibson Dunn’s Fund Finance & Structured Capital team looks forward to working with clients as they navigate these developments.~~The following Gibson Dunn lawyers prepared this update: Duncan McKay, Darius Mehraban, Ryan Kim, Sarah Lefsky, Aja Sanneh, Alin Potra, Lettie Rose, Claire Griffet, and Sonari Chidi.~~Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the issues and considerations discussed above. Please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Investment Funds practice group or the Fund Finance team:~~Duncan K. R. McKay – Head of Fund Finance, New York, (+1 212.351.2603, dmckay@gibsondunn.com)~~Darius Mehraban – New York (+1 212.351.2428, dmehraban@gibsondunn.com)~~Ryan Kim – New York (+1 212.351.4002, rkim@gibsondunn.com)~~Sarah Lefsky – New York (+1 332.253.7717, slefsky@gibsondunn.com)~~Aja Sanneh – New York (+1 212.351.2382, asanneh@gibsondunn.com)~~Alin Potra – New York (+1 332.253.7725, apotra@gibsondunn.com)~~Lettie C. Rose – New York (+1 332.253.7728, rose@gibsondunn.com)~~Claire Griffet – New York (+1 332.253.7609, cgriffet@gibsondunn.com)~~Sonari Chidi – Los Angeles (+1 213.229.7270, schidi@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Feb 19

6 min

Private Funds CFO~~A Private Funds CFO article [subscription required] discusses the hiring of Duncan K.R. McKay as partner and Head of Fund Finance.~~~~Download PDF~~

Feb 4

1 min