PE Pathways

Recorded live at Kiawah Island, SC, during our annual signature private equity event, The Cut, this PE Pathways episode features a discussion among Jeremy Levy, partner at Troutman; Jason Wolfe, managing director and general counsel at Susquehanna Growth Equity; and Joe Conlon, managing director at Hastings Equity Partners. The conversation covers the exit overhang, LP demands for DPI, underwriting in a higher-rate world, durable sectors, and what continuation funds mean for deals.

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The debate over self-employment taxes on management fees just got more complicated.

In the latest installment of our "Carried Away" miniseries, a multiepisode series under our PE Pathways podcast exploring the economics of private funds, Troutman Pepper Locke Partners Thao Le, Stephanie Pindyck Costantino, Saba Ashraf, and Tom Gray break down the evolving legal landscape surrounding the taxation of management fee income and what it means for how private equity firms structure their management companies today.

The Fifth Circuit's decision in Sirius Solutions handed a victory to fund managers, holding that state-law limited partners may be able to avoid self-employment taxes on management fee income — even when actively involved in managing investments. But with the First and Second Circuits weighing related cases involving Denham Capital and Soroban Capital Partners, a circuit split may be on the horizon, and the possibility of Supreme Court review may follow.

In this episode, our team covers:

Whether you are launching a new fund or revisiting an existing management company structure, this episode is essential listening for GPs, CFOs, and fund counsel navigating one of private equity's most unsettled tax questions.

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In the third installment of our "Carried Away" series, Private Equity Partner Jeremy Levy is joined by fellow Private Equity Partner Chris Rossi and Employee Benefits + Executive Compensation Partner Josh Gelfand to explore how carried interest flows beyond a fund's founding partners to junior and mid-level team members.

The conversation covers how PE firms structure and size carry pools for broader investment teams, the mechanics of vesting and forfeiture provisions designed to align incentives and retain talent, and the tax considerations that shape how those interests are granted — including the profits interest safe harbor, protective Section 83(b) elections, and the phantom income challenges that can catch recipients off guard.

The episode also examines synthetic carry as an alternative tool, why it may be used for certain employees or non-U.S. team members, and whether carry alone remains a sufficient draw in today's competitive talent market.

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Our "Carried Away" miniseries returns with an insider look at how private fund managers are reimagining fees and carry to win commitments in today's fiercely competitive fundraising environment. In our second episode, Private Equity Partner Stephanie Pindyck Costantino is joined by fellow PE attorneys Heather Stone and Paul Steffens. They examine how the classic "2 and 20" has evolved into a landscape of fee compression, bespoke arrangements for anchor and strategic LPs, early closer incentives, and even shared carry. Listeners will hear how GPs are using co-investment rights (often on a no-fee, no-carry basis), fee breaks, and other economic levers to launch and scale platforms — and how sophisticated LPs are leveraging early commitments, co-invest access, and long-term relationships to shape GP economics across fund generations.

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"Carried Away" is a multi-episode series under our PE Pathways podcast exploring the economics of private funds — management fees, carry, and the tax rules behind them. Each episode in the "Carried Away" series will bring together Troutman Pepper Locke attorneys for a candid conversation about what is really happening in the market, including current GP fee and carry norms, how GPs are sharing economics with anchor LPs and strategic partners, and how firms are using carry to recruit and retain talent across the organization. We also discuss how recent and pending court decisions are reshaping tax planning for management fees.

In this episode, Private Equity Partner Thao Le is joined by fellow PE Partners Stephanie Pindyck-Costantino and Ted Edwards for a practical, market level look at how private fund economics are evolving beyond the classic "2 and 20." Together, they break down what GPs are actually doing today on management fee and carry structures and distribution waterfalls for private funds and discuss the delicate balance of GP stakes and LP interests. Blending transactional and regulatory perspectives, the trio examines the tension between keeping the lights on for managers and delivering net returns for investors, and explains how to translate complex fee and carry mechanics into clear, defensible disclosures.

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This is the fourth episode in our series on private equity and distressed assets with attorneys from our Bankruptcy + Restructuring and Private Equity practice groups.

In this episode, Corporate Partner Rachel Fitzgerald sits down with Finance and Banking Partner Jason Ulezalka and Bankruptcy and Restructuring Partner David Fournier to examine how private equity investors can unlock value in distressed companies through debt-for-equity swaps and loan-to-own strategies. They discuss how converting debt to equity can deleverage a business, preserve going-concern value, align lender and owner interests, and position loan-to-own investors to strategically acquire debt and use credit bidding to gain control without paying full cash value. The conversation demystifies key concepts such as the "fulcrum security," compares out-of-court exchanges with prepackaged and pre-negotiated Chapter 11 restructurings, and explains when a bankruptcy filing is necessary to drive operational change. Along the way, they highlight practical risks — from valuation fights and fiduciary issues to lender liability and successor liability — illustrating why tight coordination among legal, financial, and operational advisors is critical in distressed M&A.

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This is the third episode in our series on private equity and distressed assets with attorneys from our Bankruptcy + Restructuring and Private Equity practice groups.

In this episode, Private Equity Partner Nick Stawasz is joined by Bankruptcy + Restructuring Partner Evelyn Meltzer to shine a spotlight on how private equity sponsors and strategic buyers can unlock value in distressed situations using assignments for the benefit of creditors (ABCs). The episode covers why ABCs have increased in popularity from both the buyer and seller perspectives, as well as the challenges that may be faced in these situations and how to address those challenges.

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This episode of PE Pathways features a recording of a recent panel discussion during a private equity event sponsored by Troutman Pepper Locke and Alliant. Private Equity Partner Nanette Heide hosted the event, and the day featured a panel moderated by fellow Private Equity Partner Joe Kadlec. Panelists included Brian Choi, managing partner and CEO of the Food Institute; Sheemul Valecha, a managing director at BDO Capital Advisors; and Craig Dubitsky, founder and CEO of Happy Products. The panel discussed the state of the deal market for the food and beverage sector.

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This is the second episode in our series on private equity and distressed assets with attorneys from our Bankruptcy + Restructuring and Private Equity practice groups.

In this episode, Private Equity Partner Thao Le is joined by her fellow Private Equity Partner Don Readlinger and Bankruptcy + Restructuring Partner Alex Rovira to unpack how sponsors, portfolio companies, and lenders can navigate the sale of a distressed asset. They break down the practical differences between out-of-court Article 9 sales and in-court Section 363 sales under the Bankruptcy Code — covering speed, cost, process control, diligence, and risk allocation — while flagging key pitfalls of such sales. Along the way, they explore how sophisticated PE firms and private credit funds can use tools like credit bidding and stalking-horse arrangements to shape outcomes on both the buy and sell sides.

Future episodes in this private equity/distressed M&A series will cover topics such as the benefits and pitfalls of acquiring assets via an ABC; debt-for-equity and loan-to-own strategies; and potential traps for the unwary in distressed M&A transactions. Our first episode in this series discussed the "State of Play in Navigating Distressed Middle Market M&A."

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In this episode of PE Pathways, Stephen Fox, a member of the health care and life science transactional team, sits down with Chelsea May, CEO and co-founder of Kyha, one of our innovative SEED™ clients from the Emerging Companies + Venture Capital practice that recently presented at the Mid-Atlantic Capital Conference in Philadelphia this past October.

Kyha is a privacy-first, AI-powered women's health platform designed to address the unmet need for trusted, medically backed, personalized answers, with access to certified experts when deeper care is needed. Their conversation explores Kyha's origin story, the power of an all‑female founding team, and practical lessons on startup building and the legal foundations required for growth.

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