Semi-liquids, GP perspectives, and portfolio construction: What are private markets offering retail investors?

As liquidity challenges dominate private markets discourses, what do fund managers need to take into account before entering private markets? At IMpower FundForum, we spoke to industry experts to find out.

Evergreen funds explained

Calling it a “small revolution”, Theo Delia-Russell, Managing Director and Deputy Head at Mediobanca Private Banking, delves into evergreen funds in private wealth, comparing their impact to ETFs because they simplify access to a complex market.

Evergreen structures can reduce issues like the J-curve, liquidity management, and capital call drawdowns, enabling more client-tailored solutions despite underlying complexity and professional-client constraints. Theo also explains the difference between evergreen funds and semi-liquid products.

As rates decline and volatility rises, private markets offer more stability and value, but they require education for bankers and clients alike.

Structuring semi-liquid products and exploring the private credit landscape

Orla Walsh, Managing Director for Europe Private Credit at Barings, compares private credit direct lending to traditional fixed income, highlighting two key differences: illiquidity and not publicly traded.

With LP demand driving the rise of semi-liquid structures, it’s important to keep liquidity risk in mind. Although these structures provide monthly cash distributions and limited quarterly redemption options, the underlying assets remain illiquid.

In addition, investors are encouraged to assess current exposure, consider diversified global platforms, and prioritise manager selection scale, track record, and clear product integrity.

The GP perspective: What challenges do private markets opportunities bring?

Veronique Fournier, Head of EMEA, Global Wealth Management Solutions at Apollo, discusses a rapid acceleration in wealth-channel demand for private market solutions, driven by recent portfolio experiences, regulatory change, and industry innovation expanding access for historically underserved private investors.

She notes private investors are typically under 3% allocated to private assets versus over 20% for institutions, creating a major opportunity. Meeting demand requires broader product access, investor education on benefits and complexities (including illiquidity risk), and significant investment in operations, technology, infrastructure, and client experience to match expectations from mutual-fund-style reporting.

Moving beyond the 60/40 portfolios with private markets

Markus Egloff, MD and Head of Global Wealth Solutions at KKR, addresses the underperformance of traditional 60/40 stock-bond portfolios, and explores the addition of private markets into the mix.

Private markets represent a vast opportunity set. Markus cites private equity as roughly 64 times larger than public markets and points out that publicly listed stocks have shrunk about 40% over the past 30 years. Additionally, private markets has the potential to boost returns, improve downside resiliency, and increase yield, but manager selection is critical, given the wide performance dispersion (up to 1400 basis points) between top and bottom quartile private equity managers. Cycle-tested partners can strengthen the case for private markets.

Join private banks, wealth managers, GPs and family offices, at IMpower FundForum’s Private Markets Summit.