Understanding Private Market Fund Structures

Private market assets—private equity, debt and infrastructure—provide opportunities for growth and diversification opportunities but are typically considered an illiquid investment vehicle. An investment vehicle can be a stock or bond, or pooled fund structures such as mutual funds, exchange traded funds (ETFs), real estate investment trusts (REITs), evergreen funds, or limited partnerships.

In recent years, semi-liquid structures like evergreen funds have gained traction, driven by rising investor demand for private assets and a more favorable regulatory environment. These funds can provide a more accessible way to invest in private markets offering faster portfolio diversification, simplified cash flow management, and lower entry barriers through reduced minimums and qualifications.

However, these fund structures still limit an investor’s ability to sell the investment at any time because they impose redemption limits at set intervals. These redemption limits are designed to support the underlying long-term strategy of the investment by avoiding forced asset sales. Because these limits can be unpredictable, investors should understand features and trade-offs of different private market fund structures when evaluating opportunities.