Ropes & Gray Hosts 2025 Credit Funds Forum

Ropes & Gray hosted its 2025 Credit Funds Forum on June 3 in midtown New York, bringing together over 150 legal and industry professionals to discuss the evolving credit landscape. The forum featured insights from partners across the firm as well as industry experts, covering topics such as continuation vehicles, the evolving regulatory landscape, new approaches to structured retail credit products, and more.

State of the Market

Finance partners Jennifer Harris and Sam Badawi co-moderated a panel highlighting the challenges and opportunities in the credit space in light of the current market environment, at its intersection with their credit opportunities practice. The State of the Market panel featured panelists Carolyn Hastings, a Partner at Bain Capital Credit, Mobi Ahmed, a Managing Director at Centerbridge, and Joseph Goldschmid, a Managing Director at Oak Hill Advisors. The panel explored the diversity of opportunities within the credit markets, how the current political climate is impacting investment options and how the market has evolved over time, with a focus on more recent events and trends sparked by the current administration that have caused volatility in the market, noting that this unpredictability provides the chance to learn and seek new investment strategies. Specifically, the impact of the tariffs was discussed with panelists noting that the financial terms of deals have tightened across sectors. However, panelists noted the true impact of the tariffs has yet to be seen. For example, referencing the pharmaceutical industry, it was discussed that much of the supply of pharmaceuticals was already in the country. Therefore, it will be another few months before the impact on that sector will be realized.

The panelists indicated that another key trend currently in the market is the proliferation of liability management transactions, with companies facing issues with capital raises put in place in the 2018-2021 timeframe, which have already gone through at least one liability management transaction, while currently remaining in precarious situations. Panelists discussed how the longevity of these deals impacts opportunities given the maturity wall and the option to file for chapter 11. The long-term nature of these deals has led to three distinct views from investors. The first is to leave open the liability management transaction terms such that a subsequent liability management transaction can be successful. The second is that investors are looking to take the keys to the company and take an active role in managing the company back to health. The third is investor fatigue where investors are looking to be bought out of their stake in the company. The deal specifics surrounding the company and the risk appetite of the investors determine which is most apt in any given situation.

The panel concluded with predictions by the panelists of what we can expect in the market over the remainder of the year, with volatility being an overarching thread through each panelist’s forecast.

Innovations and Opportunities in Retail Alternatives

Asset management partner Sarah Clinton moderated the Retail Alternatives panel, which featured Kevin Michel, Managing Director at Blackstone, Jenny Neslin, General Counsel & Secretary at TPG Angelo Gordon, and Gregory Rubin, General Counsel & Partner at Oak Hill Advisors. The panel discussed the growth of the private capital markets and resulting opportunities for retail alternative funds.  The panelists described commonly used and emerging fund structures for the delivery of private credit strategies, including interval funds, BDCs, and 1934 Act registered private funds.  They discussed the benefits and challenges of the various structures and explored key considerations in launching and managing retail alternatives, including distribution, pricing, valuation, and registration.  The panelists noted the importance of managing investor expectations around liquidity and discussed options in connection with oversubscribed tender or repurchase offers. Other topics included regulatory investment limitations and the recent modernization of co-investment exemptive relief.  The panel concluded with the panelists sharing their enthusiasm for working in the innovative and opportunity-rich retail alternatives space.

Regulatory Updates and Trends for Registered Advisers Post-2024 Elections

Co-head of the global securities and futures enforcement practice Eva Carman was joined by co-head of the private regulatory practice Joel Wattenbarger and London-based private funds regulatory partner Eve Ellis to discuss regulatory updates for registered advisers. The panel began by discussing updates to the SEC rulemaking agenda following the 2024 elections, including a renewed focus on cryptocurrency and off-channel communications.

The panel then examined trends in SEC exams, predicting that the SEC staff will focus on examining smaller and newly registered advisers, with substantive inquiries into fees and expenses, conflicts, and valuation, as well as the use of projected and hypothetical performance in marketing materials. They emphasized the importance of incorporating robust conflict disclosures in credit fund offering documents and other investor-facing materials, particularly for managers investing in different parts of the capital structure of the same issuer for different clients.

The group also discussed trends in SEC enforcement actions and the agency’s focus on private credit. They advised the audience on how to analyze insider trading with respect to CLOs and warned about the agency’s new interest in identifying instances of “shadow trading,” as recently seen in the Panuwat case. The panel encouraged advisers to continue monitoring the flow of material nonpublic information within their firms arising from credit investing.

The panel concluded with a summary of relevant EU rulemaking updates for advisers with European credit vehicles or offering these vehicles to European investors. This included an update on the Sustainable Finance Disclosure Regulation (SFDR), recent EU SFDR enforcement actions, and a summary of the impact of the upcoming Alternative Investment Fund Managers Directive 2 for credit managers.

The Rise of Continuation Vehicles: Insights and Future Trends in Private Credit

Ropes & Gray alternatives asset opportunities partner Adam Dobson moderated the Continuation Vehicles panel, featuring Jennifer Cunningham, Managing Director in Investor Solutions at NXT Capital, Ed Goldstein, Partner and Chief Investment Officer of Coller Credit Secondaries at Coller Capital, and Scott Beckelman, Global Co-Head of Secondary Advisory at Jefferies. The panel discussed the rise of continuation vehicles for private credit, describing 2024-2025 as a likely inflection point for the market given the coalescence of factors facilitating the surge in transaction volume. They named the rise of dedicated credit secondaries funds with appropriate return targets, a mature portfolio of senior debt funds looking to provide accelerated liquidity to investors and novel transaction structures as features which have helped buyers and sellers to unlock this market. Jennifer Cunningham shared NXT’s first credit continuation fund as an example, which closed in 2023, highlighting how NXT brought together two funds nearing the end of their terms to create a larger, diversified portfolio.

Looking ahead, the panelists expect this market to continue growing, as both buyers and sponsors now have the necessary tools, a large addressable market, including mezzanine and other types of junior debt and a broader market socialization built on the efforts of the first movers in this space. As credit continuation fund transactions evolve and become more fast-paced, the panelists emphasized the importance for managers to communicate with limited partners and avoid overstepping since it remains important to treat existing investors as partners in these transactions.