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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Welcome to Thompson Hine’s inaugural edition of our Private Fund Formation newsletter – The Investment Objective. As innovation and regulatory change continue to reshape the asset management industry, our goal is to provide practical insights that help clients stay informed and ahead of emerging developments.

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Published quarterly, this newsletter will highlight key legal and industry trends affecting private fund sponsors, investment managers, and emerging platforms. Each edition offers timely regulatory updates, perspectives on market developments, and practical insights drawn from our work with clients. &nbsp; We will also use this space to introduce members of our team, highlight client successes, and share perspectives from industry events and conversations with market participants. We look forward to staying connected and sharing perspectives that support the continued growth and success of our clients and the broader investment management community nationwide.&nbsp; <a href="https://www.pages05.net/thompsonhinellp/Subscribe/index.html">Subscribe</a> to future Private Fund Formation mailings.

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<a href="https://www.thompsonhine.com/professionals/daniel-a-filstrup/">Daniel Filstrup</a> is counsel in the firm’s Chicago office and a member of the Investment Management and Private Fund Formation practices. He advises sponsors and investment managers on the formation and structuring of private investment funds, as well as ongoing regulatory and compliance matters. His practice includes counseling clients on issues under the Investment Advisers Act and Investment Company Act, along with emerging areas such as digital assets and blockchain-related investment strategies. Earlier this year, Daniel spoke at the Paralel Technologies Client Forum 2026 at Copper Mountain, where industry leaders and clients gathered to discuss key trends shaping the asset management industry, including technology and platform innovation, ETF product development, and evolving regulatory considerations. Daniel’s combination of fund formation experience and regulatory insights makes him a valuable resource for sponsors navigating today’s evolving investment landscape.

In Case You Missed It - Coffee Chat: Private Fund Formation Deep Dive

Thank you to everyone who joined our recent virtual Coffee Chat on private fund formation. If you were unable to attend or would like to revisit the discussion, you can access the recording <a href="https://www.youtube.com/watch?v=qhdbFp9bKV0">here</a>.

During the program, our presenters discussed key considerations in structuring private investment funds across a range of strategies, including startup investing, trading strategies, lending, and digital assets. The discussion explored common fund structures such as master-feeder arrangements, parallel funds for different investor types, and the use of U.S. and offshore vehicles, along with the primary legal exemptions relied upon by private funds.

Additional topics included tokenized fund interests, transfer restrictions, special economic arrangements for investors, manager compensation structures, selecting fund service providers, and practical considerations for marketing and capital raising. The session also addressed valuation and redemption mechanics, as well as the issues sophisticated investors are prioritizing in diligence processes in 2026.

SBIC Program Rule Changes Usher in Modernization, Alignment, and a Faster Path to Licensing

On February 2, 2026, the U.S. Small Business Administration (SBA) finalized rule changes revising the Small Business Investment Company (SBIC) program. These amendments are best understood as a targeted modernization and cleanup of outdated provisions and legacy program structures. As part of the update, the SBA eliminated provisions tied to obsolete SBIC structures, clarified the eligibility framework for certain investments, and streamlined aspects of the licensing process, while maintaining its supervisory and diligence standards. <a href="https://www.thompsonhine.com/insights/sbic-program-rule-changes-usher-in-modernization-alignment-and-a-faster-path-to-licensing/">Read more</a>.

Venture Capital: Emerging Managers and Asset Allocation

Institutional venture portfolios have historically prioritized scale, brand, and track record. However, recent research from Colibrí Institute suggests those conventions may be leaving meaningful returns on the table. An analysis of more than 2,400 U.S. venture funds indicates that emerging managers consistently outperform more established peers on key metrics such as IRR and value creation. This advantage appears structural rather than episodic: smaller fund sizes, earlier entry points, and more concentrated portfolios position emerging managers to capture outsized outcomes in a power-law asset class.

At the same time, traditional institutional screening frameworks, often centered on prior fund history, brand recognition, and scale, may systematically exclude these high-performing managers, despite limited correlation with performance. For sophisticated LPs and fund managers, the implication is clear: emerging managers should be viewed not as a peripheral allocation, but as a core component of a differentiated venture strategy. <a href="https://admin.thompsonhine.com/wp-content/uploads/2026/04/Colibri-Institute-Why-EVCMs-Matter-2026.pdf">Read more</a> on the Colibrí Institute’s analysis.

Thompson Hine also recognizes that there are many hurdles for emerging managers, which is why we established our Emerging Fund Manager’s Program to get new private fund managers started the right way and with controlled, manageable and easily understandable expenses. While the market for new managers may be challenging, working with counsel doesn’t need to be. If you are new manager and interested in learning more, contact a <a href="https://www.thompsonhine.com/services/private-equity/private-fund-formation/">Private Fund Formation</a> team member today.

Navigate the legal landscape of investment management regulation by subscribing to our Investment Management Regulatory Update blog <a href="https://www.thregupdate.com/subscribe/">here</a>.

The Investment Objective – May 2026

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