Apr 21: New research* from Carne Group (Carne), Europe’s largest third-party management company (ManCo), reveals that both wealth managers and private markets fund managers expect assets under management (AUM) held in semi-liquid vehicles to exceed $3 trillion by 2030. The semi-liquid market has already demonstrated explosive momentum, with AUM nearly tripling between 2020 and 2024 to approximately $349 billion**.
Nearly eight out of 10 (78%) private market fund managers surveyed expect the sector to surpass $3 trillion by 2030. Wealth managers are equally bullish: 54% expect AUM to reach between $3 trillion and $3.5 trillion, while 18% believe the figure will climb even higher.
Semi-liquid funds operate as open-ended investment vehicles, providing sophisticated and mass-affluent retail investors with access to typically illiquid assets like private equity, with periodic redemption windows.
Wealth managers and IFAs increase their focus on the semi-liquid wrapper
Carne’s research reveals 72% of wealth managers surveyed already use semi-liquid funds for their clients. The remaining 28% are preparing to follow suit almost immediately – 75% of those not currently offering these funds expect to start within the next 12 months, and the remaining 25% within the next two years.
The speed of adoption is reflected in the anticipated weightings within client portfolios. Nearly a third (32%) of wealth managers surveyed expect to have 5% of their clients’ total investible assets in semi-liquid funds within three to four years. This conviction strengthens over a slightly longer horizon, with 66% expecting to hit that 5% allocation within four to five years.
Commenting on the growing focus wealth managers are placing on semi-liquid funds, Des Fullam
Chief Regulatory and Client Solutions Officer, Carne Group, said: “The democratisation of private markets must be met with a rigorous commitment to retail investor education. For this ‘retailisation’ trend to be sustainable, investors must fully grasp the mechanics of periodic redemptions and the long-term nature of the underlying assets. Empowering wealth managers with the right educational tools is as critical as the digital infrastructure itself in ensuring that mass-affluent investors can build truly diversified, resilient portfolios.”
The manager pipeline: A Massive Supply Shift
While the demand from wealth managers is clear, the supply side is also moving quickly. Currently, only 2% of the private market fund managers surveyed have launched a semi-liquid fund. However, the survey reveals a massive potential pipeline of new entrants:
- 19% of private market fund managers surveyed are considering launching a semi-liquid fund within the next 12 months
- 42% plan to launch within 12 to 18 months
- 29% are targeting a launch within 18 to 24 months
In total, over 90% of the managers surveyed intend to have a semi-liquid offering in market within the next two years, signalling a fierce competitive landscape as firms vie for retail market share.
Des Fullam added: “We are seeing a historic pivot in how private capital is raised and deployed. Wealth managers are no longer viewing private markets as an optional ‘extra’ but as a core component of a modern, diversified portfolio. For fund managers, this represents a golden opportunity to tap into a massive, relatively untapped pool of retail capital.
“However, the operational complexity of managing semi-liquid vehicles – balancing daily or monthly subscriptions with illiquid underlying assets – requires a level of digital sophistication and governance that many firms are only now beginning to implement.
“As the industry moves toward the potential 2030 $3 trillion milestone, the distinction between “institutional” and “retail” investment strategies is blurring. The next decade of growth in private markets will not be driven solely by pension funds and other institutional investors, but also by the democratisation of access via the semi-liquid wrapper.”
Regulatory tailwinds: The ELTIF and LTAF Boom
The expansion of the market is being underpinned by significant regulatory progress in Europe and the UK. The European Long-Term Investment Fund (ELTIF) 2.0 and the UK’s Long-Term Asset Fund (LTAF) have become the primary vehicles for this “retailisation” wave.
Private market managers are overwhelmingly optimistic about these structures:
- LTAFs: 84% of managers surveyed expect flows into LTAFs to increase over the next 12 months, with 44% predicting a “dramatic” increase
- ELTIFs: 77% expect flows into ELTIFs to rise over the same period, with 34% anticipating dramatic growth
