What GPs Need to Know Now: Compliance, AI, and the Evolving Regulatory Landscape

In a moment defined by shifting rules, emerging tech, and investor caution, Juniper Square’s Private Markets Regulatory Council came together to unpack what matters most for private fund managers. The first session of our 2025 series brought together compliance, legal, and operational experts to discuss how GPs can lead with confidence, even in uncertain times.

Here are the top takeaways:

A recent SEC FAQ on the Advisers Act Marketing Rule has given GPs some relief when discussing performance, allowing for the flexibility to present gross-only performance for a single investment or group of investments extracted from a fund or other portfolio, subject to certain conditions. Noting that the new FAQ was celebrated by GPs as good news, Olga Kamensky, a partner at Kirkland & Ellis, the prior SEC FAQ regarding levered and unlevered net IRRs was not altered by the new FAQ, and the updated guidance still maintains that net performance must be presented for metrics other than extracted performance, like total return, the IRR, and MOIC of a fund or a composite. “Folks are still figuring out how the relief could potentially apply with respect to anything beyond extracts from a fund's historical performance,” she added.

The gray area around current yield remains particularly tricky for managers marketing income-producing strategies. If it's forward-looking, is it hypothetical performance? Or just context? Michael McVickar of Origin Investments weighed in from the GP perspective: “Anybody investing in an income-producing product wants to know what the expectations are going forward, which presents a challenge.”

However, Carlo di Florio, President of ACA Group, pointed out that the FAQs indicate that the new SEC leadership wants to provide relief and ensure ongoing dialogue and open communication channels.

The group cautioned that while a more permissive administration at the federal level may offer short-term flexibility, it should not be mistaken for a free pass. “A lot of people I'm talking to, their concern is less about federal regulations, but more about who steps in to fill the gaps,” said Dan Rothenberg of Juniper Square.

State regulators and international bodies like the EU are already filling the void. For instance, Block was recently fined $40 million by the New York regulator for AML/KYC failures. This is after the firm agreed in January to pay an $80 million civil fine to settle similar charges by 48 U.S. state financial regulators. “That fine didn't come from FinCEN, but it still came,” concluded Rothenberg.

If the SEC raises its advisor oversight threshold from $100 million to $250 million in AUM, that would push more mid-sized firms into state-level compliance regimes—each with their own rules, expectations, and potential for scrutiny.

And then there’s the lookback risk. di Florio and McVickar agreed that anything a GP does now could still trigger an investigation under a future administration.

di Florio also pointed out that private fund managers can't assume they're totally off the radar even with reduced SEC capacity (due to staff attrition and budget constraints). He added that “if the SEC Exam and Enforcement teams still have deep private fund experience, expertise, and focus, and the allocators are still there and have significant expectations in their diligence.” This underscores the importance of having robust, well-documented compliance programs, regardless of how loose or strict the regulatory environment may be at a moment in time. Mature compliance functions aren’t just a safeguard but a strategic asset.

“With the “With the new Anti-Money Laundering/Countering the Financing of Terrorism (“[AML/KYCFT]") rule kicking in on January 1st, 2026, that's a good opportunity for investment advisors to look at their compliance programs before they are officially required to have AML/CFT programs and figure out any gaps between what they're currently doing and what the new rules will require,” advised Kamensky.

Juniper Square can help fund managers stay ahead of the evolving regulatory landscape for years to come. Learn more about our AML and KYC solutions →

The council agreed that AI is no longer hypothetical—it’s here. Over the past year, GPs have shifted from blanket bans on AI tools to grappling with how to integrate them responsibly. That shift is especially evident in policy development. Firms are now building more granular, use-case-driven AI governance frameworks that define which tools are allowed, where firm data can be used, and how outputs must be reviewed and documented.

ACA Group, for instance, is incorporating AI into its compliance technology, solutions for marketing review, expert networking chaperoning, e-com surveillance, employee compliance, and AML/KYC compliance. “We have a roadmap to continue over 2025, further integrating it into our other technology solutions more broadly,” said di Florio. “It's incredibly valuable. It accelerates effective and efficient compliance, reduces false positives, facilitates more efficient workflows, and drives more meaningful results.” He believes industry adoption will accelerate in the second half of 2025 and into 2026.

The group also discussed model risk, hallucinations, and regulatory blind spots. Rothenberg noted that while federal policy might lag, the EU and states like California are already drafting rules that could impact fund managers. “The FTC has already fined people for fake AI claims,” he warned.

He also cautioned fund managers against blind trust in AI’s outputs. To test various models, Rothenberg asked AI to do complex accrued interest calculations where the inputs change at different times. He found that “the math it comes back with is completely wrong, but it's very confident that it's right. You would think that AI would be good at math, but it's just interpreting the question differently than you thought it would. So it's giving you a different answer.”

The closing reflections hit a consistent theme: This is a time to stay sharp.

McVickar spotlighted the indirect effects of tariffs and how they’re reshaping underwriting and supply chain planning.

Kamensky emphasized that firms must remember that today's compliance decisions can be scrutinized years later, and aggressive positions should still be backed by careful, consistent oversight.

Rothenberg called out that those who can decisively navigate regulatory uncertainty stand to win big.

di Florio summarized it best: “This is a great time for compliance to be at the table and work with the business to help seize new opportunities. Whether it's expanding retail access to alternative investments, introducing a simplified regulatory framework around digital assets, or supporting innovation and capital formation around AI, good leadership can help seize those opportunities.”

As this environment evolves, so will regulators', allocators', and investors' expectations. At Juniper Square, we’ll continue working alongside our advisory council to help our clients adapt.

Stay tuned for more takeaways from our 2025 Private Markets Advisory Council sessions.