The investment landscape is buzzing with new possibilities as fund companies aim to make private equity more accessible to everyday investors through vehicles like interval funds. These funds are generating interest by allowing portfolios to include significant allocations to private assets, sidestepping the limitations imposed on traditional mutual funds.
While the ability to invest in private equity within an interval fund offers diversification, the illiquid nature of these holdings presents serious challenges. Liquidity issues, compounded by venture capital structures, can severely limit the ability to trade private assets.
Despite these hurdles, the demand for private market exposure in interval funds continues to rise, presenting both opportunities and significant risks for investors seeking to enter this space.
Finsum: If liquidity concerns are not very high then this alternative makes a lot of sense for many investors.