2026 Market, Regulatory and Technology Pressures: Asset Management Risk Insights

Global markets closed 2025 with steady gains, supported by resilient economic growth, easing inflation trends and greater clarity around monetary policy. Despite the longest government shutdown in years and softening labor data, equity markets finished the year near record highs, while long-dated government bonds rallied as rate-cut expectations solidified.

For asset managers, the fourth quarter highlighted a familiar tension: strong headline performance alongside growing structural, regulatory and technology-driven risks. As firms look at 2026, developments in artificial intelligence, digital assets and SEC oversight continue to reshape both opportunity and compliance expectations.

Market Update: Growth Amid Policy and Political Uncertainty

Several major equity indices finished the year near record or multiyear highs, capping a strong year for U.S. equities. This performance came despite a challenging fourth-quarter backdrop that included the longest government shutdown in years and signs of labor-market softening.

Bond markets responded positively to shifting rate expectations. Long-dated government bonds rallied as investors priced in additional rate cuts, while U.S. Treasury yields trended lower amid cooling inflation data and weaker employment indicators. At the same time, uncertainty surrounding the January nomination of a new Federal Reserve chair and ongoing tensions between the Federal Reserve and the current U.S. administration raised questions about policy independence heading into 2026.

Private equity fundraising remained subdued in the fourth quarter, consistent with trends observed throughout 2025. Total capital raised was modest, with investor commitments increasingly concentrated among mega-funds and larger managers. This concentration underscores the continued challenges facing smaller and emerging managers as allocators remain selective and liquidity considerations remain top of mind.

Looking ahead, markets are monitoring a complex mix of potential catalysts and risks. Continued geopolitical tensions, active global conflicts, diverging monetary policies and the upcoming U.S. midterm elections all have the potential to influence investor sentiment. At the same time, concerns are emerging that the rapid expansion of artificial intelligence-driven growth could evolve into an AI-driven valuation bubble, adding another layer of uncertainty for global markets in 2026.

Digital Assets: Volatility Returns, Infrastructure Advances

Digital asset markets reversed much of their earlier momentum in the fourth quarter, as an October tariff shock triggered widespread liquidations and accelerated profit-taking. More than $1 trillion in market value was erased during the quarter, making Q4 2025 Bitcoin’s second-worst quarterly decline since 2022 after unwinding from its October peak. While performance lagged, the pullback highlighted the continued sensitivity of digital assets to macroeconomic and policy-driven shocks.

Despite heightened volatility, structural adoption continued to deepen. Institutional engagement remained strong through regulated products such as ETFs and ETPs, reinforcing the long-term foundation of the digital asset market heading into 2026. Market infrastructure also continued to evolve, signaling a shift from speculative growth toward operational integration and risk management.

Tokenization emerged as a notable area of progress. The Depository Trust & Clearing Corporation (DTCC) described regulatory permission to offer tokenization services for participants and clients on approved blockchains, an initiative viewed as a step toward standardizing tokenization within core post-trade infrastructure. Industry participants increasingly view blockchain-based infrastructure as an opportunity to modernize fund operations. Potential benefits include more automated processing, improved transparency and auditability of ownership records, reduced reconciliation complexity and the potential for programmable compliance.

In parallel, blockchain-based issuance-to-servicing platforms for private funds were launched in 2025, facilitating early end-to-end transactions spanning issuance, settlement and servicing. Regulatory acceptance also continued to broaden globally, with both the SEC and FINRA moving toward greater accommodation of cryptocurrencies within mainstream compliance frameworks and Luxembourg’s regulator approving a fully tokenized fund on a public blockchain.

While near-term volatility remains a defining feature of the digital asset market, these infrastructure and regulatory developments suggest that digital assets and tokenization are becoming increasingly embedded within traditional asset management operations rather than remaining on the periphery.

Regulatory Outlook: 2026 SEC Exam Priorities

The SEC’s 2026 examination priorities signal an important shift in how regulatory risk is framed for asset managers, particularly those overseeing private funds. For the first time since 2019, the SEC did not include a standalone private fund section in its exam priorities. Instead, private fund risks have been integrated into core fiduciary obligations, underscoring the expectation that advisers embed private fund considerations across their broader compliance frameworks rather than treating them as a distinct category.

Key areas of focus include illiquid and private credit holdings, valuation practices and liquidity management. These issues have taken on heightened importance amid market volatility and evolving redemption pressures. The SEC is also emphasizing allocation conflicts across strategies and fund structures, particularly where advisers manage multiple vehicles simultaneously or launch new funds alongside existing offerings.

Advisers entering the private fund space or expanding product lines may face increased scrutiny, with examiners expected to focus on fee structures, side letters and disclosure practices. The continued “retailization” of alternative investments is another notable theme, reflecting the growing availability of private strategies to noninstitutional investors and the corresponding need for enhanced investor protections.

Beyond private funds, the SEC has highlighted several cross-cutting priorities that are expected to shape examinations in 2026. Amendments to Regulation S-P require firms to strengthen privacy and safeguarding programs, while broader attention to cybersecurity, artificial intelligence, conflicts of interest and dual registrants signals an expanding focus on technology-driven and operational risks. As AI tools become more deeply integrated into investment, compliance and operational processes, examiners are likely to assess governance, oversight and control frameworks alongside traditional fiduciary considerations.

2026 Strategic Outlook

As asset managers move further into 2026, proactive governance and technology oversight will be essential to meeting evolving regulatory expectations and managing emerging risks. Developments over the past year signal that private fund and digital asset considerations are no longer viewed as niche areas of oversight but have become mainstream components of regulatory examinations and risk management frameworks.

For upcoming SEC examinations, firms should prioritize strengthening controls around artificial intelligence and cybersecurity, particularly as AI tools are increasingly embedded across investment, compliance and operational functions. Clear governance structures, documented oversight processes and robust data management practices will be critical in demonstrating appropriate use and supervision of these technologies.

In addition, advisers should continue to focus on allocation conflict management, valuation and liquidity practices for private and illiquid assets, and compliance with Regulation S-P’s enhanced privacy and safeguarding requirements. Firms offering private strategies to a broader investor base may also need to reassess disclosure practices and investor protections as retail access to alternative investments expands.

From AI-driven innovation and digital asset infrastructure development to evolving SEC exam priorities, asset managers face a landscape in which technological advancement and regulatory scrutiny are advancing in parallel. Staying informed, adaptable and well-governed will remain central to navigating risk and opportunity as 2026 unfolds.

How Weaver Can Help

As regulatory scrutiny and technology adoption accelerate, asset managers face increasingly complex risk considerations. Weaver’s asset management consulting team works with firms to assess emerging risks, strengthen governance frameworks and prepare for evolving regulatory expectations. Contact us for assistance.

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