Key Takeaways
- • Major U.S. law firms including Sidley Austin, Davis Polk & Wardwell, Simpson Thacher & Bartlett, Ropes & Gray, and Skadden Arps Slate Meagher & Flom operate undisclosed internal investment funds allowing partners to invest directly in private equity, collectively managing millions of dollars across decades.
- • Sidley Austin's SA Investment Partnership has accumulated at least $311 million from partner investments across five private equity funds since 2009, operating as a fund-of-funds structure with voluntary participation independent from firm management.
- • Davis Polk's Stetson Capital fund has raised at least $66 million since its 2019 reporting period, established in 2000 and managed by capital markets partner Michael Kaplan, with documented partner investments in TPG Capital funds.
- • Ropes & Gray has operated its investment pool (RGIP LP) since 1998 out of its Boston office, demonstrating the long-standing nature of these parallel investment structures across elite law firms.
- • None of the firms publicly disclose these investment vehicles on websites or partner biographies despite their widespread knowledge among private equity practitioners, raising questions about transparency and potential conflicts of interest management.
Summary
A Law.com investigation has uncovered a widespread but undisclosed practice among major U.S. law firms: operating internal investment funds that allow partners to directly invest in private equity. The firms involved—Sidley Austin, Davis Polk & Wardwell, Simpson Thacher & Bartlett, Ropes & Gray, and Skadden Arps Slate Meagher & Flom—have collectively managed millions of dollars through these vehicles, which have remained largely invisible to external parties despite being common knowledge within private equity circles.
Sidley Austin operates the SA Investment Partnership, a fund-of-funds vehicle managed from its Chicago office. According to SEC filings, the partnership has accumulated at least $311 million in partner capital across five separate private equity funds since 2009. The fund operates on a voluntary basis and maintains formal independence from senior firm management, with investment decisions made separate from the firm's commercial and client considerations. Davis Polk's parallel structure, known as Stetson Capital fund (named after early firm senior figure Francis Lynde Stetson), has collected at least $66 million since 2019, though the fund itself was established in 2000. Michael Kaplan, a New York-based capital markets partner and member of the firm's management committee, oversees the fund, which has deployed capital into TPG Capital's offerings.
Ropes & Gray has maintained an even longer-standing investment structure—its investment pool, RGIP LP, has operated from the firm's Boston office since 1998. Despite requests for comment, all firms contacted declined to publicly address these investment vehicles, suggesting a strategic preference for discretion around their existence and operations. The existence of these funds raises considerations around transparency, partner access to deal flow, potential conflicts of interest, and the broader intersection of law firm economics with alternative asset management—an area with limited public visibility or regulatory guidance.
Sidley Austin operates the SA Investment Partnership, a fund-of-funds vehicle managed from its Chicago office. According to SEC filings, the partnership has accumulated at least $311 million in partner capital across five separate private equity funds since 2009. The fund operates on a voluntary basis and maintains formal independence from senior firm management, with investment decisions made separate from the firm's commercial and client considerations. Davis Polk's parallel structure, known as Stetson Capital fund (named after early firm senior figure Francis Lynde Stetson), has collected at least $66 million since 2019, though the fund itself was established in 2000. Michael Kaplan, a New York-based capital markets partner and member of the firm's management committee, oversees the fund, which has deployed capital into TPG Capital's offerings.
Ropes & Gray has maintained an even longer-standing investment structure—its investment pool, RGIP LP, has operated from the firm's Boston office since 1998. Despite requests for comment, all firms contacted declined to publicly address these investment vehicles, suggesting a strategic preference for discretion around their existence and operations. The existence of these funds raises considerations around transparency, partner access to deal flow, potential conflicts of interest, and the broader intersection of law firm economics with alternative asset management—an area with limited public visibility or regulatory guidance.
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