Private markets continue to grow, and with that growth comes sharper regulatory attention. Throughout 2026, we expect regulators to double down on three pillars: valuation governance, controlled private-market liquidity, and the responsible adoption of AI. For managers, each trend brings both pressure and opportunity, and the firms that respond proactively will differentiate themselves with investors and regulators alike.

1. Valuation conflicts and governance

Conflicts of interest have always existed in private markets, but regulators now see valuation-related conflicts as one of the riskier points in the sector. Their focus is not only on identifying conflicts but also on the quality of governance, the robustness of oversight, and the clarity of documentation surrounding key valuation judgements.

Supervisors increasingly expect managers to demonstrate:

• Clear accountability frameworks, where ownership of valuation decisions is unambiguous and supported by strong committee structures.
• Granular records of how material judgements were reached, why methodologies were selected, and how conflicts were mitigated.
• Defined triggers for ad hoc valuations, helping mitigate stale marks and giving investors confidence that pricing reflects market reality.
• Transparent reporting, with greater disclosure around assumptions, sensitivities and the treatment of outlier events.

The use of continuation vehicles, cross asset transfers, and performance marketing based on unrealised gains is only intensifying scrutiny.

Where conflicts are material, regulators increasingly view the use of independent third party valuers as good practice, but delegation alone is no longer sufficient. Supervisors are now probing:

• Oversight of external valuers
• Identification of conflicts within valuation service providers
• Disclosure of scope, methodology and frequency of external valuations

2. PISCES and the rise of controlled private market liquidity

Another structural shift set to shape 2026 is the emergence of controlled liquidity mechanisms through platforms such as the Private Intermittent Securities and Capital Exchange System (PISCES).

These platforms introduce periodic trading windows for private company shares, giving companies control over pricing parameters, investor eligibility and disclosure obligations. They provide a way to improve liquidity without importing the full weight of the public markets regime.

For alternative managers, PISCES introduces both strategic opportunities and governance challenges:

Opportunities

• New tools for portfolio management, including partial exits, liquidity events, and earlier recycling of capital.
• A potential avenue to enhance investor liquidity without disrupting fund structures.

Risks

• Pricing governance in semi liquid trading windows.
• Information asymmetry between existing and incoming investors.
• New conflict scenarios for managers coordinating transactions across multiple funds or vehicles.

Managers engaging with PISCES style platforms will need to ensure that their valuation processes, conflicts frameworks, and disclosure controls are capable of operating in a more dynamic secondary environment.

3. Artificial intelligence: supervision shifts from interest to expectation

AI adoption accelerated across the alternative investments ecosystem. Regulators are moving from curiosity to heightened supervisory expectation, including:

• Human oversight: ensuring that AI-supported decisions remain anchored to accountable individuals.
• Explainability and documentation: maintaining evidence that AI use aligns with conduct requirements.
• Governance and risk frameworks: particularly for models that influence portfolio decisions, client outcomes or regulatory reporting.

Managers should expect increasing pressure to demonstrate:

• Clear policies governing AI deployment.
• Defined responsibilities for model validation.
• Controls around data lineage, data quality and bias.
• Training and competence frameworks for staff interacting with AI tools.

The message is clear: AI can be transformative, but regulators expect firms to balance innovation with governance discipline.

Final thoughts: The governance agenda is reshaping expectations for managers

Conflicts management, valuation governance, emerging liquidity structures and AI adoption are becoming mutually reinforcing themes. Together, they reflect a supervisory environment that values:

• Transparency.
• Accountability.
• Robust oversight.
• Investor-centric outcomes.

For managers, 2026 isn’t simply about compliance, it’s about strengthening the governance foundations that will support growth, resilience and investor trust in an increasingly complex private markets ecosystem.