The US Securities and Exchange Commission (SEC) has removed longstanding constraints that limited retail investors’ access to private funds. With this practice now withdrawn, demand for alternative strategies is set to rise, thus creating a larger addressable market for products that package private equity, private credit, and hedge-style exposures. However, realising the opportunity will still hinge on rigorous due diligence and clear education on fees, liquidity, and risk.
For more than two decades, retail closed-end funds that invested 15% or more of assets in underlying private funds were, in practice, steered toward accredited-investor sales and a $25,000 minimum. The SEC has now ended that approach. This means more private equity, private credit, and hedge-style exposures can now be wrapped in registered closed-end vehicles marketed to ordinary brokerage clients.
The commercial implications are significant. Broader use of semi-liquid “closed-end fund-of-funds” structures can bring private markets into standard wealth channels at a time when clients are seeking diversification and less correlated return streams amid policy and market uncertainty.
GlobalData’s 2025 Financial Services Consumer Survey found that 22.4% of US investors pick their provider primarily because it offers access to a wide range of investments—the top driver of provider choice. Providers that can credibly widen access to high-quality alternatives are positioned to capture flows and improve retention.
Source: GlobalData
However, client education such as plain English explanations of liquidity mechanics and transparent illustrations of fees—in the form of “know before you allocate” client materials—will be critical. In addition, segmenting clients by their liquidity needs and time horizon will ensure sensible sizing and reduce forced selling.
Now that the policy door is open, wealth managers that can pair broader access with disciplined selection and clear client education stand to benefit.
Heike van den Hoevel is Principal Analyst, Wealth Management, GlobalData
“SEC clears wider retail access to private funds via registered closed-end funds” was originally created and published by Private Banker International, a GlobalData owned brand.
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