Private Markets Poised for Retail Revolution in 2025, But Risks Loom | FT Opinion
- Editor
- Jan 11
- 2 min read
What's New According to a Financial Times "Adventurous Investor" opinion piece by David Stevenson, investment firms are aggressively rolling out "semi-liquid funds" to give wealthy retail investors unprecedented access to private market investments, including private equity, infrastructure, and private credit - traditionally the domain of institutional investors.
Why It Matters This shift democratizes access to private markets at a time when more valuable companies are staying private longer, potentially offering retail investors broader diversification opportunities but also exposing them to significant liquidity risks and longer investment horizons.
Big Picture Drivers
Disruption: Traditional active fund managers are being squeezed between passive ETFs and private market opportunities, forcing strategic pivots
Access: New semi-liquid fund structures allow monthly, quarterly, or annual withdrawals with 5-10% caps, creating a middle ground between fully liquid and illiquid investments
Performance: Alternative investment trusts are trading at steep discounts (20-40% below NAV), while private market opportunities continue expanding
Innovation: Platforms like WealthClub and Moonfare are providing retail access to prestigious funds from managers like OakTree and HgCapital
Demand: High-net-worth investors are seeking diversification beyond public markets, particularly in sectors like software, business services, and healthcare
By The Numbers
16%: Expected average EBITDA growth for leading private equity portfolio companies
20-40%: Current discount range for alternative investment trusts to NAV
5-10%: Typical withdrawal limits on semi-liquid funds
5-15 years: Traditional private market investment horizons
1 month to 1 year: Redemption frequency for semi-liquid funds
Key Trends to Watch
Private equity firms are increasingly focusing on resilient sectors with recurring revenue streams, particularly in software and healthcare. T
he macro environment is showing signs of improvement, potentially leading to more profitable exits. Investment platforms are expanding their offerings of top-tier private market funds to retail investors.
Traditional asset managers are developing new fund structures to bridge the liquidity gap between public and private markets.
The Bottom Line for Investors While 2025 presents compelling opportunities to access private markets through semi-liquid structures, investors must carefully weigh the trade-off between potentially higher returns and limited liquidity. Success will depend on selecting managers with proven operational improvement capabilities and understanding the long-term commitment required.
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