Even a temporary US government shutdown can ripple through private markets, but a prolonged one can reshape them. Lower liquidity and delayed distributions add to a trend that pre-dates the shutdown: weaker DPI ratios. Lynette Elam, a partner in Goodwin’s Private Equity group, notes that investors are already focused on realized returns. “If the shutdown begins to affect distributions or exits, managers will need to proactively manage communication with LPs,” she says. Still, Elam points out that operationally, most private funds can keep functioning, since private investment funds generally have minimal government filings. And the Securities and Exchange Commission’s EDGAR website is still operating, so Form D filings and Blue Sky notices can continue. "Being prepared is always better than being unprepared,” says Elam. “If firms organize everything now, it helps them move faster once government operations resume.”
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