SEC Moves to Widen Retail Access to Private Markets as Evergreen Funds Ration Exits
The SEC wants to let retail funds charge performance fees on unrealized gains. The evergreen funds already selling to retail are capping withdrawals.
NEW YORK, October 5, 2026. The SEC wants to make it easier for ordinary investors to own private market funds. The same week, a large evergreen manager announced it would rebuild a flagship fund. Investors had asked for their money back.
Both stories are about the same product.
What the SEC proposed
The SEC voted on September 30 to propose two rulemakings, per a Kirkland & Ellis client alert. The first covers mutual funds, ETFs, closed-end funds and BDCs. Their advisers could earn performance fees with no investor suitability test. The fee would be capped at 20 percent of net gains. The fund board would have to find the deal serves shareholders.
One detail matters most. The cap could apply to unrealized appreciation. Today, BDC advisers can take a capital gains fee only on realized gains.
The second rulemaking would loosen interval funds. A fund could wait two years, instead of two intervals, before its first repurchase offer. Monthly repurchase offers would become possible. Today a fund must hold 100 percent of an offer amount in liquid assets. That would give way to a principles-based standard. Funds would need to meet requests without selling holdings at prices far from current values.
Comments are due 60 days after Federal Register publication. Kirkland said adoption in some form appears likely. The SEC is down to two commissioners of one party.
The plumbing is already strained
Partners Group said this month it plans to split its Global Value SICAV into a compounding fund and a distributing fund. The fund has a net asset value of €6.6 billion. Citywire reported the move follows elevated withdrawal requests that forced the firm to prorate redemptions. Shareholders must approve the change.
Roberto Cagnati, incoming co-CEO, said the split lets investors “align capital with their liquidity needs and return objectives without compromise.”
Apollo is in a similar spot on the credit side. It capped withdrawals from Apollo Debt Solutions BDC at 5 percent for a third straight quarter. Requests reached 14.7 percent of shares, down from 16.8 percent the quarter before, Bloomberg reported. Apollo said most of the requests were investors re-tendering earlier unfilled ones. At Ares Strategic Income Fund, requests fell to 13.1 percent of shares from 14.4 percent, and withdrawals were again limited to 5 percent, Reuters reported.
Meanwhile, Blackstone launched BXPM last month. It is a perpetual private markets fund for eligible non-U.S. investors, built on its $324 billion private wealth platform. The supply of these products keeps growing.
Where fees meet liquidity
A performance fee on unrealized gains rests on a valuation. So does the price at which a redeeming investor gets paid. Both depend on the manager’s marks.
That is manageable when few people want out. It is harder when requests run at three times the quarterly cap. A looser liquidity standard also leaves a fund more reliant on other investors staying put.
Gates and proration are how these funds are meant to work under pressure. Retail investors may not have expected them. Disclosure, not the rule text, will decide how well that is explained.
What to watch
Read the comment letters on fees for unrealized gains and on the new liquidity standard. Watch the Partners Group shareholder vote. Check the next round of tender results at the large evergreen credit funds. If requests keep falling, the SEC’s timing looks good. If they do not, it looks early.