Recent Legal Developments Affecting Syndicated Real Estate Funds

Two recent developments may affect private funds, including syndicated real estate offerings. First, at the end of last summer the SEC adopted the Private Fund Adviser rules, regulations that cover certain aspects of management over investment funds. Second, the Corporate Transparency Act ("CTA") took effect on January 1, 2024, requiring most entities to register their beneficial ownership information with FinCEN.

New SEC Private Investment Fund Adviser rules

At the end of last summer, the SEC adopted the Private Fund Adviser rules (the "New SEC Rules"). These rules generally apply to investment vehicles (typically a limited liability company or limited partnership) that raise capital from investors to invest in securities or other investments. Real estate syndications ("Funds"), as well as private equity funds and venture capital funds, fall within the definition of investment vehicles for purposes of these rules. While the majority of the New SEC Rules relate