Semi-Liquid Investment Market Set to Exceed $3 Trillion by 2030
Wealth managers and private market fund managers are forecasting a dramatic surge in semi-liquid assets under management over the next four years, as retail investors increasingly gain access to markets traditionally dominated by institutional players.
Projected Growth and Market Expansion
According to data from Carne Group, assets under management held in semi-liquid vehicles are expected to surpass $3 trillion (£2.2 trillion) by 2030. This represents a remarkable expansion from the market's size of roughly $349 billion between 2020 and 2024, indicating nearly a tripling of assets in that period.
Nearly eight out of ten private market fund managers anticipate the sector will exceed this $3 trillion threshold by the end of the decade. Wealth managers share this optimism, with 54 percent predicting the market will reach between $3 trillion and $3.5 trillion. Meanwhile, 18 percent believe the figure could climb even higher.
Understanding Semi-Liquid Funds
Semi-liquid funds operate as open-ended investment vehicles that provide investors with access to typically illiquid assets such as private equity. These assets were previously available almost exclusively to institutional investors, but in recent years, more sophisticated and mass-affluent retail investors have entered the market.
This shift is driven by investors seeking greater portfolio diversification and the potential for higher yields on returns. Over 70 percent of wealth managers already utilize semi-liquid funds for their clients, with an additional 28 percent preparing to adopt these vehicles within the next two years.
Portfolio Allocation and Investor Education
The rapid adoption of semi-liquid funds is reflected in changing portfolio weightings. Wealth managers expect approximately five percent of clients' investible assets to be held in semi-liquid funds within three to four years, with others projecting to reach this allocation within four to five years.
Des Fullam, chief regulatory and client solutions officer at Carne Group, emphasized the importance of 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."
Fullam added: "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."
Supply Chain Acceleration and Market Opportunities
While wealth manager demand for semi-liquid vehicles is clear, the fund supply chain is also moving rapidly. Currently, only two percent of private fund managers have such funds on the market, but 19 percent are considering launching one within the next twelve months—a significant increase.
Looking further ahead, 42 percent plan to launch a fund within 12 to 18 months, with an additional 29 percent aiming for the next 18 to 24 months. Fullam noted: "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."
He continued: "For fund managers, this represents a golden opportunity to tap into a massive, relatively untapped pool of retail capital." However, Fullam also highlighted the operational complexity of managing these vehicles, noting that only a few firms have begun to implement the necessary infrastructure.
Blurring Lines Between Investor Categories
Market growth is projected to extend beyond traditional pension funds and institutional investors as the distinction between these entities and retail investors continues to blur. More investors are looking to secure semi-liquid wrappers as part of their investment strategies, further driving market expansion and diversification.
This trend underscores a fundamental shift in investment accessibility, with semi-liquid vehicles becoming increasingly integral to portfolio construction across investor categories.
