Private markets are being sold to ordinary investors. Read the gates
In a semi-liquid fund, your right to withdraw is capped, and the cap tightens exactly when you most want out.
Understand what you are giving up in exchange for access.
How Private markets are being sold to ordinary investors. Read the gates works, in one picture
The same argument as the text, as a chain. Each step is what makes the next one possible.
What a 2% fee costs over thirty years
Both lines earn the same 8%. One pays 0.07% a year, the other pays 2%. The gap is not a rounding error, it is most of the point of the exercise.
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The pitch is real: these were genuinely closed to you
Private equity and private credit produced strong returns for institutions for decades, and individuals could not get in. New fund structures have changed that. That part is a real democratisation and it is not nothing.
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But the liquidity is engineered, not natural
The underlying assets cannot be sold quickly. So the fund promises you a limited window instead: perhaps you may redeem a small percentage of the fund's value each quarter. In calm markets you will never notice the limit.
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The gate closes when everyone wants out
If redemption requests exceed the cap, they are scaled back. Everyone gets a fraction of what they asked for. This is not a scandal, it is the stated design, and it is written in the prospectus.
It does mean the liquidity is precisely least available in the scenario where you wanted it. That is not a bug that can be fixed; it is what happens when you wrap illiquid assets in a liquid-looking package.
Ask one question of any such fund: what happens if 30% of investors ask for their money in the same quarter? The answer is in the documents, and it is not 'they get it'.
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And check the fees, which are not index-fund fees
Management fees plus performance fees, often on top of fees at the underlying fund level. That drag compounds against you for as long as you hold, and it has to be beaten before you are ahead of a tracker.
You can state your fund's redemption cap and what happens when it is breached.
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In a semi-liquid fund, your right to withdraw is capped, and the cap tightens exactly when you most want out.
Every one shows its exact method, and the circumstances in which it is wrong. Free, and no account to look.