The Private Market Rush: Are Investors Being Sold an Illusion of Liquidity?

Private markets have become one of the fastest-growing segments of global finance, attracting record levels of investor capital. Yet behind the boom lies a mounting concern: are intermediaries adequately explaining the risks to their clients? Industry leaders now warn that a failure to do so could trigger a wave of mis-selling complaints.

 

The issue is particularly acute in Europe and the UK, where wealth managers and advisers are racing to offer private equity, private credit, and infrastructure investments. Many investors, lured by the promise of higher returns than public markets, may not fully grasp the constraints attached.

 

Unlike equities or bonds, these assets are inherently illiquid — and that mismatch between expectation and reality is shaping into a potential fault line.

Key Points

• Assets in evergreen and semi-liquid funds doubled to €88bn by June 2025, according to Novantigo.
• Wealth managers from RBC, Evelyn Partners, and Quilter Cheviot are promoting private market products more aggressively.
• Liquidity risk looms large: withdrawals are usually only allowed every few months.
• UK’s Long-Term Asset Funds (LTAFs) and EU’s ELTIFs are expanding access to private markets.
• Morningstar warns these funds remain untested in severe downturns, raising systemic concerns.

Evergreen Funds: A Revolution or a Risk in Disguise?

Demand for private assets has surged as wealth managers look to provide differentiated opportunities to clients. By mid-2025, assets in evergreen or semi-liquid funds hit €88bn, more than twice the amount recorded at the start of 2024, according to consultancy Novantigo.

 

Yet enthusiasm has outpaced experience. Private capital executives warn that many intermediaries lack the knowledge to properly assess the risks. For some, the temptation to market funds as “liquid” has raised red flags across the industry.

 

“Unlike public equities, these investments are designed to be held over long periods,” explained Steffen Pauls, co-chief executive of Moonfare. If clients misunderstand that dynamic, he argued, disappointment is almost inevitable.

Can Advisers Really Explain Illiquidity?

At the heart of the debate lies liquidity — or the lack of it. Although investors can put money into these funds monthly, withdrawals are usually limited to every few months. During times of market stress, even those limited windows may close.

 

Mara Dobrescu of Morningstar described the products as untested in a “severe risk-off environment.” She warned that consecutive quarters of withdrawals could force managers to suspend redemptions, a scenario retail investors may find hard to accept.

 

Executives at alternative asset managers echo that concern. One noted that while larger banks like JPMorgan and Julius Baer impose thorough checks before distributing funds, smaller intermediaries often do not. That uneven level of scrutiny exposes the market to uneven levels of risk.

Who Stands to Benefit, and Who Bears the Risk?

Despite the risks, interest in private markets is booming. Wealth managers such as RBC Wealth Management, Evelyn Partners, and Quilter Cheviot are all expanding access for clients. DIY platform Hargreaves Lansdown has announced it will offer Long-Term Asset Funds (LTAFs) within pension wrappers.

 

Traditional asset managers are also seizing the moment. Schroders has launched its own LTAFs, while Carmignac has entered partnerships with private market specialists. For firms, these products represent a growth engine. For clients, however, they represent a long-term lock-up of capital.

 

One asset manager executive said their firm was dedicating significant resources to educating advisers on the intricacies of private market vehicles. The aim: to minimise mis-selling risks before complaints escalate.

BlackRock’s Next Chapter: A Leadership Shake-Up

While private market intermediaries wrestle with risk, BlackRock — the world’s largest asset manager — is preparing for the future with sweeping leadership changes. The firm has expanded its global executive committee to include 20 executives, among them European head Sarah Melvin and strategy lead Mike Pyle.

Chief executive Larry Fink and president Rob Kapito wrote that the expansion reflects a commitment to “unlocking the full potential of talent across the firm.” The firm has also formalised a senior management committee, bringing together top figures including COO Rob Goldstein, CFO Martin Small, and international head Rachel Lord.

 

The restructuring is part of a five-year plan to double BlackRock’s market value. For Fink, cultivating leadership depth is central to delivering that goal.

Can the UK Afford Its Spending Habits?

Beyond the asset management industry, the UK government faces mounting financial pressure. Borrowing reached £83.8bn in the first five months of the fiscal year — the highest since the pandemic. That figure exceeded the Office for Budget Responsibility’s forecast by more than £11bn.

In August alone, borrowing hit £18bn, far above the £12.5bn projection. Economists now expect Chancellor Rachel Reeves to announce further tax rises in November, having already introduced £40bn in hikes during her first Budget.

 

PwC UK economist Nabil Taleb noted the political and economic difficulty of the choices ahead: “The test will be whether she can make them palatable to voters and markets.” Capital Economics’ Paul Dales suggested the Budget may need to raise as much as £28bn to preserve fiscal credibility.

 

Markets are paying attention. The pound weakened and long-term borrowing costs climbed after the latest data release, underscoring the scale of investor unease.

What Happens If Confidence Breaks?

For private markets, the risk is that mis-selling could undermine confidence just as capital inflows reach record highs. If investors feel misled about liquidity, complaints could ripple across the industry.

 

Such disputes would damage not only advisers but also the asset managers building these products.

 

For governments, the risk is fiscal credibility. Reeves must persuade markets that the UK’s borrowing trajectory is under control. Failure to do so could drive up borrowing costs further, squeezing already limited headroom.

 

And for BlackRock, the risk is strategic. A bold five-year plan to double market value depends on both execution and trust in leadership. Any missteps could stall momentum in a highly competitive industry.

Conclusion: A Year of High-Stakes Tests

Private markets are booming, but the risks are rising in equal measure. Illiquidity, if misunderstood, could trigger a wave of investor frustration and possible mis-selling claims. Wealth managers must decide whether they are educators or simply distributors — and their choice will define the sector’s resilience.

 

At the same time, the UK government’s fiscal test grows sharper, and BlackRock’s leadership evolution will determine how the world’s largest asset manager navigates the decade ahead.

 

One thing is clear: whether in private markets, public finances, or corporate strategy, the months ahead will be marked by choices whose consequences may last far longer than investors or policymakers expect.