The problem with “semi-liquid” funds might start with the name. When I spoke to Luke Sarsfield of alternative investment firm Ridgepost Capital, he made a simple point: people hear “semi-liquid”… and miss the “semi.” They just hear “liquid.”

That’s a fun quote, but it does point to something more structural.

For investors, managers, and allocators, it raises a basic question: who controls liquidity when very different investors share the same pool of capital?

 

 

Institutions with long time horizons have long anchored private markets, including private credit, but asset managers have been eagerly launching funds designed to attract more individuals and families who want access without giving up the ability to get their money back during times of stress. When markets get volatile, those expectations can collide.

That tension is becoming more visible at a moment when institutional investors are laser-focused on liquidity — not because they’re rethinking private markets wholesale, Sarsfield says, but because distributions have slowed and timelines have stretched. As he put it in Episode 18, investors obviously need to “see the fruits of [their] labor.”

(Listen to the full conversation on Spotify or wherever you get your podcasts — or by scrolling to the end of this article.)

Increasingly, retail and institutional investors aren’t just participating in the same market — they’re sitting in the same funds. Retail investors may want their money back in periods of stress, while institutions are often more inclined to stay invested so they have time to ride out potential losses — or deploy more money and take advantage of attractive valuations. 

You can see that tension in how these retail-oriented products have been designed. The limits on redemptions — often around 5 percent per quarter — aren’t accidental. They’re meant to prevent managers from having to sell assets at discounted prices just to meet withdrawals, which can hurt the returns for investors who remain.

(There’s no shortage of headlines about firms like Blue Owl, Blackstone, and Ares facing waves of redemption requests from family offices and individuals — and how they’re responding.)

None of that is new on its own. But taken together, it highlights a shift that is.
Private markets aren’t just dealing with longer exit timelines or questions about liquidity. The real shift is the mix of investors, their different behaviors under stress, and the challenge facing managers. 

The conversation with Luke also touches on middle‑market investing, why the most sophisticated firms are constantly in a frenzied chase for only 10 to 15 percent of private companies, why broadly syndicated loans are likely facing the same issues as private credit, and how firms are using AI inside investment and operating processes.

 

Follow In Conversation with Julie Segal on Spotify or on Apple Podcasts. 

About
In Conversation with Julie Segal is a dialogue between Julie Segal, editor of Institutional Investor Magazine, with the people who have shaped and continue to influence the world of institutional investors. The podcast features both familiar names talking about new ideas and upstarts who want to do things differently.

Note: Interviews are editorially independent from our sponsors.