As demand for private markets moves from the institutional core to a broader wealth and affluent investor base, asset managers are re‑architecting both how they build strategies and how they deliver them. The semi‑liquid fund segment has emerged as a key battleground, sitting between traditional daily‑liquid products and long‑lock institutional vehicles. Against this backdrop, structure is becoming as strategic as asset allocation itself.  

Ryan Burns, Head of Global Fund Services, Americas at Northern Trust, brings a front‑row view into how interval and tender offer funds are driving semi‑liquid market growth, how their distinct liquidity features align with different investor needs, and what managers should weigh when choosing the right vehicle for their next product launch.  

CM: When you talk to asset managers, how do you define the “semi-liquid” category, and why has it become such a focal point so quickly? 

RB: “Semi-liquid” funds are most often understood to be 1940 Act regulated vehicles that differ from traditional mutual funds and ETF products. So, this would include unlisted closed-end funds (interval and tender-offer funds), listed closed end-funds, and business development companies (BDCs) of which there are several flavors. When used in the broadest sense, it’s not uncommon for industry participants to include non-traded REITS and the emerging category of evergreen private equity funds. 

As traditional asset managers face pressures in public markets – fee compression, manager competition, and performance headwinds – many are turning to private markets for diversification, alpha generation, and long-term growth. The semi-liquid space is a great place for them to start that journey. 

CM: What are the main forces driving demand for private markets through semi-liquid vehicles rather than traditional institutional structures? 

RB: The primary driver is the semi-liquid nature of these products rather than traditional institutional structures for private market assets, which are purely closed-end with significant capital commitments, long lock-up periods, and even delays in returning capital to investors when the secondary markets are slow – as is the case in the current market environment.  

The periodic liquidity offered through semi-liquid vehicles provides investors with assurance that they will have some access to liquidity while still providing meaningful access to private markets as a potential source of both higher returns and greater investment diversification across the portfolio.  

A favorable regulatory environment is providing more flexibility in terms of the types of investments semi-liquid funds can make, as well as how investments can be sourced. This is driven by the broader goal of making private markets accessible to more investors, specifically retail investors and retirement plans, while still providing the substantial investor protections set forth through the ‘40 Act and giving plan sponsors and fiduciaries the confidence they can offer the investment options with prudence. 

CM: Which types of underlying strategies tend to fit best in an interval fund versus a tender offer fund, and why? 

RB: One of the most important considerations when designing a semi-liquid fund is aligning the liquidity of the portfolio with the liquidity requirements that govern the fund as well as investor liquidity expectations. Funds that invest in more liquid, income-producing assets—such as private credit—are often well-suited to interval funds.  

These strategies can meet regular redemption schedules and deploy new capital efficiently, minimizing the risk of cash drag. In contrast, strategies focused on highly illiquid assets, like private equity, may be better served by tender offer funds. The flexibility to limit new capital inflows and fund board discretion in redemption offerings allow managers to maintain alignment with investment objectives and avoid undue transaction costs or negative price impacts. 

CM: Which types of investors tend to be better suited for interval funds versus tender offer funds, and why? 

RB: Both fund structures can be suitable for a wide range of investors as long as the investors are well-educated on investment risks and liquidity limitations. However, retail investors typically expect liquidity, transparency, and regulatory safeguards, having grown accustomed to daily NAVs and ease of transacting in mutual funds and ETFs.  

Interval funds, with their predictable redemption schedules and regulatory oversight, are often the preferred choice for this segment. Institutional and high-net-worth investors, on the other hand, are generally more comfortable with illiquidity and less frequent reporting, in exchange for the potential of higher returns.  

Tender offer funds are typically valued less frequently and as such typically allow subscriptions monthly, or less frequently. They can further restrict investor liquidity, and as a result can accommodate a greater degree of illiquid asset classes, in turn making them better suited to more targeted investor segments rather than retail channels which often require a greater degree of liquidity as well as rebalancing flexibility. 

CM: Are you seeing advisors develop clearer preferences—or even mandates—around one structure versus the other? 

RB: Traditional managers seem to be predominantly pursuing interval funds, allowing them to leverage their experience and comfort with supporting daily valuation which is a common election for the majority of interval funds, as well as a preference within their well-established wide distribution networks through RIAs, wirehouses, and retirement and recordkeeper platforms. 

Private markets advisors tend to be a bit more balanced from our discussions as they aim to align the complexity and illiquidity of the asset classes with which their investment expertise lies with investor suitability and access to target distribution channels, often focusing on institutions and HNW. 

CM: From an operational standpoint, what are the key differences managers should weigh when launching and maintaining each vehicle? 

RB: There are many operational nuances and complexities that managers should consider when launching and maintaining either of these semi-liquid funds including valuation, cash management and liquidity, compliance, and partnering with the right distribution partners and service providers. Valuation requires a robust framework to comply with Rule 2a-5, with respect to the frequency of valuation, independent valuation partners, and potential fair valuation of private market instruments where pricing is more opaque. 

Cash management and liquidity management tools and insights are essential to effectively monitor and balance the liquidity profile of any complex and illiquid investments in private markets with potential investor redemption. 

Distribution is critical to product success and establishing connectivity to a host of new and varied distribution partners while integrating connectivity with the middle and back-office requires significant operating model design and coordination. 

Expanding into the semi-liquid space may also require reevaluating relationships with fund administrators, custodians, transfer agents, valuation and data vendors, and technology platforms to ensure scalability, automation, and transparency that can be unified across the public and private markets and facilitate compliance with the robust regulatory framework governing these fund structures. 

CM: How do you see the semi-liquid market evolving over the next few years as liquidity expectations continue to shift? 
 
RB: Semi-liquid funds are poised to experience growth supported by the continued democratization of private markets, which serves as one of the industry’s most significant trends, and even priorities. Education, particularly of advisors and retail investors, on private market assets and the liquidity features of the funds providing access to those investment opportunities is critical to continued adoption and success.  

Semi-liquid funds should be just one building block within the investor’s total portfolio and when diversified effectively, a range of liquidity preferences can be managed without sacrificing access to private markets.  Regulatory tailwinds will further accessibility and adoption while also ensuring that there is accountability and robust protections in place for investors, including monitoring how these products provide investors access to liquidity.  

CM: Do you expect one structure to dominate, or will interval and tender offer funds continue to coexist with clearer differentiation? 

RB: Both structures are well positioned for growth for the foreseeable future. However, a few factors favor Interval Funds to experience more significant and sustained growth given the prospect of guaranteed liquidity these funds are required to offer investors. That feature, coupled with the preference for daily valuation, better positions interval funds for placement on many distribution platforms as well as for adoption with the sizable retail and retirement segments, particularly as they become important building blocks within target date funds and model portfolios. 

Several years ago, tender-offer funds had a larger market share by both # of funds and assets under management. However, over the past few years interval funds have grown at a faster rate and surpassed them in both measures as of the end of 2025, and represent most of the products that have filed registration statements pending approval, a trend that appears to have room to run.