Navigating private market vehicles for financial intermediaries 

Financial intermediaries today face a growing landscape of fund structures, each with distinct liquidity features, regulatory considerations, and operational complexities.

From interval funds and non-listed Business Development Companies (BDCs) to evergreen LPs and closed-end drawdown funds, understanding the nuances of these vehicles may contribute to potential success in portfolio construction.

Semi-liquid structures like interval funds, tender offer funds, and evergreen LPs typically provide a middle ground between daily liquidity and long-term capital lockups. These vehicles may help mitigate the J-curve effect, mitigate blind pool risk, and potentially offer greater operational ease. However, they also bring challenges, including liquidity constraints, potential portfolio drag from cash buffers, and possibly less transparency around fees and valuations.

By contrast, closed-end drawdown vehicles remain the traditional model in private markets, with defined investment periods and longer lock-ups. While they typically offer alignment and more control over investment pacing, they can be less accessible for retail clients and in our experience slower to reach full exposure.

For wealth managers, seeking to align investment vehicle choice with client liquidity needs, risk tolerance, and long-term financial goals is key. Evaluating fund structure isn’t just about liquidity; it’s also about cost, control, access, and operational efficiency.

In a landscape where private market access is expanding, but complexity is in our view increasing, a thoughtful approach to vehicle selection has potential to enhance client outcomes and support more resilient portfolios.