Private markets 2025: the emergence of semi-liquid funds transforming access for private wealth

Private markets in 2025 have begun to look less like an institutional preserve and more like a mass-market opportunity, as a wave of semi-liquid, evergreen and interval fund structures proliferate to meet demand from private wealth channels. What started as a trickle of specialist products has accelerated into a broad industry shift , driven by managers, platforms and advisers seeking to offer private equity, private credit, venture and infrastructure exposures with smoother liquidity and greater accessibility for individual investors.

According to Private Equity International, the year has been dominated by the private wealth push and the rise of semi-liquid funds, with coverage ranging from investor Q&As to an extended private wealth special report. Industry data compiled by investment consultancy Bfinance shows there are now more than 400 multi‑strategy and single‑strategy evergreen products in the market, a diversity of structures that Bfinance says “offers a unique combination helping solve specific investor problems and create a differentiated moat around the wealth manager”.

The product innovation spans jurisdictions and legal wrappers. In the United States, 40 Act interval funds and 40 Act tender funds have become prominent, while in Europe the ELTIF 2.0 regime is shaping new offerings. Managers including Hg, Ardian, ICG, Pantheon, Adams Street Partners and Coller Capital have strengthened their private wealth capabilities by launching semi‑liquid vehicles, reflecting a broader strategic pivot. Deloitte Luxembourg notes that many general partners are moving from closed‑ended formats to open‑ended alternative products to tap demand from semi‑professional and wealth clients, enabling continuous inflows and redemptions and widening the investor base to those with net wealth ranging roughly from €1 million to €100 million.

Growth has been rapid. Morningstar’s 2025 report highlights a 60% increase in assets held in semi‑liquid funds between 2022 and 2024, reaching $344 billion, and warns that while these structures offer smoother access to private markets they can carry higher fees and liquidity constraints that investors must scrutinise. State Street’s 2025 Private Markets Study similarly finds that 38% of North American managers expect at least half of their private markets flows will come from funds aimed at individual investors within the next two years, underscoring how wealth channels are set to become a material distribution route.

For many investors and advisers, the attractions are clear. PEI’s LP Perspectives Study identifies operational simplicity, increased liquidity and reduced J‑curve exposure as the top reasons institutional limited partners are committing to semi‑liquid funds. Providers argue that these formats can lower barriers to entry, improve transparency and deliver more predictable cash flows , features that wealth managers and clients value when allocating to alternatives. Moonfare and other platforms are deploying hybrid approaches, for example, blending secondary strategies with flexible holding periods to smooth distributions and mitigate early‑stage J‑curve drag.

Yet the shift is not without controversy. Institutional investors and industry groups have warned that the influx of retail capital could change GP incentives, pricing and allocation behaviours. A white paper from the Institutional Limited Partners Association and preliminary results from ILPA’s Limited Partner Sentiment Survey suggest institutions are wary of the potential for conflicts as GPs raise both institutional and retail capital. Private Equity International reported that institutional LPs have been asking hard questions of managers about how they will approach the retail market and safeguard institutional interests.

“[We’re] really asking about how they’re going to approach this market,” Karen Nes, associate portfolio manager at Aware Super, said at PEI Group’s Women in Private Markets Summit in December. She added that the superfund “would push back quite significantly” on retail capital in its managers’ funds, warning of differing economics and allocation policy issues. Rachel Farrell, director of public and private markets at Nest, told the same event: “I’m starting to pause a bit… around this move towards private markets for the retail audience and what that’s going to do to the marketplace.” Farrell said retail vehicles raise concerns around valuation and co‑investment dealflow and noted that institutional investors have benefited from co‑investment opportunities that might be affected by a wider retail push.

Those tensions reflect competing dynamics. For wealth clients, semi‑liquid vehicles can deliver diversification, compounding and easier access to private market returns than listed alternatives, as MNAARA has observed. For private markets managers, expanding into retail channels is both a commercial opportunity and a strategic necessity as distribution models evolve. But industry participants caution that structure matters: not all evergreen or interval funds are equal, and legal, operational and fee differences across jurisdictions will determine suitability for different investor types. Miguel Sosa, managing director and senior investment strategist at StepStone Group, told Private Equity International that the rationale behind these structures is “to make products more convenient, efficient and transparent for investors, removing some of the challenges and barriers that have prevented retail investors from accessing private markets in the past.”

The product mix is also evolving by asset class. Morgan Stanley has documented a rapid rise in semi‑liquid private credit, an area well suited to periodic liquidity given its cashflow characteristics. Venture and AI‑focused strategies continue to attract interest in evergreen formats, while private equity and infrastructure remain popular for investors seeking exposure to larger, more established companies and long‑term real assets.

Regulators and advisers will face pressure to ensure suitability and disclosure keep pace with product innovation. Morningstar’s report and other industry commentaries emphasise the need for careful evaluation of fund structures, costs and liquidity mechanics before recommending these vehicles to retail clients. As the market grows, so too will the need for clearer investor education, robust governance and transparent valuation practices to manage the risk of mis‑selling and preserve confidence across both wealth and institutional channels.

The rise of semi‑liquid funds thus marks a defining inflection point for private markets: a democratising wave that promises broader access and product innovation, but one that also raises fundamental questions about allocations, incentives and market structure as retail capital becomes a mainstream part of the private capital ecosystem.