Regulatory scrutiny of private credit funds has intensified following concerns about valuation practices and potential conflicts of interest. The US Department of Labor proposed expanding 401(k) plans to include private funds, but Treasury Secretary Scott Bessent warned that any signs of trouble could derail retail participation. The SEC has begun examining business development companies and interval funds for issues including redemption rights and fee structures.

Maine's Public Employees Retirement System has slashed its private equity allocation from 12.5% to 10%, joining other pension funds reducing exposure due to liquidity concerns and underperformance. The $22.3 billion system plans to cut pacing over three years while reassessing manager relationships. This follows University of California Retirement System's decision to lower private assets targets from 30% to 25%, citing lower returns compared to public markets.

Meanwhile, exit activity in Asia Pacific shows promising signs with public market exits for PE-backed assets growing 25% to $31.4 billion. Mainland China saw a dramatic 165% increase to $14.7 billion, while India maintained its position as the top exit market despite an 18% decline. These liquidity improvements could help restore investor confidence in markets that have struggled with exit uncertainty.