Semi-liquid funds — often called “evergreen funds” — are private markets funds with no fixed term that issue shares continuously at net asset value (NAV) and redeem them at set dates within limits: typically quarterly, capped by a gate of around 5% of fund assets. Unlike a closed-end fund, the money is fully invested from day one; unlike an ETF, the exit can be planned but not guaranteed. In Europe they appear above all as ELTIFs under Regulation (EU) 2023/606 or as open-ended AIFs — at the end of 2025 Scope counted 268 registered ELTIFs with €34.0 billion in recorded assets, and worldwide the segment manages just under US$600 billion (as at March 2026).
97 of the 140 funds recorded — a good two thirds — redeem quarterly, 27 monthly.
n = 140 · calculated from our fund database · as at Oct 2026
Only a small slice of the economy is listed on a stock exchange. The mid-sized engineering firm, the wind farm, the fibre network, the chain of medical practices — the vast majority of companies and projects are not listed. That is where “Private Markets” invest: as equity (Private Equity), as debt (Private Credit) or in real assets such as infrastructure and real estate. The counterpart is “Public Markets”: shares and bonds, tradable at any time.
The quickest way to understand “semi-liquid” is to compare it with what you already know:
| ETF / open-ended fund | Semi-liquid fund | Closed-end fund | |
|---|---|---|---|
| Selling possible | any time, every trading day | on fixed dates, capped | practically not at all |
| Price | live exchange price | NAV struck at regular intervals | valuation, rarely |
| Entry | from a few euros | often from €1–10,000, one-off payment | large sums, capital calls over years |
| Term | indefinite | indefinite (“evergreen”) | fixed, usually 10+ years |
| Investments | listed | not listed (Private Markets) | |
Who this is not for: the emergency reserve and money with a date attached (buying a house, tuition). These funds belong at the long end of the portfolio — an investment horizon from about five years, as a satellite holding, not as the core.
The idea is not new — the first attempt simply failed. The ELTIF (“European Long-Term Investment Fund”) has existed as an EU legal framework since 2015. But the first version had hurdles that almost nobody wanted to clear: a minimum investment of €10,000, a cap of 10% of financial assets for investors with less than €500,000, and narrowly drawn rules on the permitted investments. The tally at the end of 2021, six years after the start: 54 products holding around €7 billion — across the whole of Europe (Scope, ELTIF Report 2023).
The relaunch came with ELTIF 2.0, Regulation (EU) 2023/606, in force since 10 January 2024. It scrapped the minimum investment and the 10% wealth cap outright; in place of a bespoke access test, the ordinary MiFID II suitability assessment applies. The investment framework became more workable (at least 55% instead of 70% in long-term assets, fund-of-funds structures permitted) — and above all, the regulation expressly recognises open-ended, semi-liquid ELTIFs with rules-based redemptions. The detailed technical rules followed in October 2024 as Delegated Regulation (EU) 2024/2759 (EUR-Lex).
The second force is economic, and the industry calls it “retailisation”: pension funds and other institutional investors have largely filled their private markets quotas, and private wealth is the largest pool of capital still barely tapped. Large managers have therefore built structures that fit custodian banks, savings plans and smaller tickets.
Together the two have multiplied the market in a short time: the €34.0 billion held by the 198 funds that reported assets (end of 2025) represents an increase of 54.7% in a single year; 113 new products launched in 2025 alone, and around three quarters of all 268 ELTIFs are open to retail investors (Scope ELTIF-Studie 2026). Worldwide — centred on the US — the segment’s just under US$600 billion is more than twice as much as in 2022 (Morningstar, “The State of Semiliquid Funds 2026”). The market is young all the same: most funds have yet to live through a full market cycle, and 2025 brought the first stress tests — the property ELTIF Greenman OPEN temporarily suspended redemptions in December 2025, and Altaroc Horizon 2024 is being wound up (Scope, 2026). The growth is documented — the real test is still under way.
“Semi-liquid” describes the mechanics, not the legal form — and investor protection and access both hang on that form. Three wrappers dominate in Europe. The ELTIF is the only private markets vehicle with an EU-wide distribution passport for retail investors; its redemption rules have been harmonised across Europe since 2024. The Luxembourg Part II fund (Part II UCI) is a regulated open-ended AIF that many large houses use for their evergreen strategies — more flexible than the ELTIF, but authorised for distribution country by country and often aimed at wealthier or semi-professional investors. The German open-ended property fund is the oldest semi-liquid structure and, with a statutory 24-month minimum holding period and a 12-month notice period, stricter than most ELTIFs (property chapter). US vehicles such as interval funds or non-traded BDCs work in much the same way, but as a rule are not accessible to European investors — a yardstick, not something you can buy. The same “semi-liquid” label, different rules: which framework applies is set out on every one of our fund detail pages.
The right to redeem is not a free extra — it is paid for in three places, and all three are set out in the prospectus.
The liquidity buffer costs return (“cash drag”). The fund holds part of its assets in cash, money-market instruments or listed securities. The ELTIF detail rules tie this buffer to the redemption terms — a fund that redeems frequently and offers short notice periods has to hold more liquid assets: under one of the two calibration options in the RTS, monthly redemption requires at least 25% in liquid assets (Del. Reg. (EU) 2024/2759, Annex II; the full table in the liquidity management tools chapter). If 15% of the fund earns money-market rates and only 85% is working in private markets assets, every percentage point of return difference between the two pots dilutes the overall result. You cannot have flexibility and the full market return at the same time.
The fee base. In a closed-end fund the management fee is initially charged on committed capital; in a semi-liquid fund it runs on NAV — from day one on all the money you have paid in, liquidity buffer included. That is more honest than it sounds (you pay on what you have invested), but it is not cheap: Morningstar puts the average ongoing cost ratio of semi-liquid funds at around 3% a year, with performance fees not yet fully counted in (Morningstar, 2026).
You are buying an existing portfolio at an estimated value. When you buy in, you take on a pro-rata share of everything the fund already holds — at the NAV as determined, with no discount and no room to negotiate. Whether that NAV is a good match for market value right now is something you only learn later (see Valuation & NAV). And new money still has to be invested: if more flows in than the pipeline can absorb, it sits in the buffer and dilutes the return further. For evergreens, deployment discipline is a standing task, not a one-off effort.
When a closed-end fund reports “20% return” and an evergreen “11%”, the two figures measure different things. Closed-end funds work with the IRR (internal rate of return): it measures the return only on the capital called so far, for as long as it is working in the fund — often as much as half the commitment sits uncalled in your account. An evergreen reports a time-weighted return on your fully invested money. Partners Group works the example through: a 20% net IRR turns a commitment into roughly 2.8 times the money over ten years. An evergreen reaches the same with around 11% a year, because every euro works from day one and proceeds are reinvested automatically (Partners Group, “Accessing private markets: Evergreen funds”, 2024; a provider source). The honest yardstick is therefore: what becomes of one euro over the same period? The evergreen also skips the J-curve, the start-up losses of closed-end funds — but it carries the costs described above permanently, and according to Morningstar only a few semi-liquid funds are likely to beat their benchmarks after costs (Morningstar, 2026). Which route leaves more in the pot therefore depends on whether you can shoulder capital calls — and what uncalled capital earns while you wait. More on IRR, time-weighted returns and multiples in the evergreen performance chapter.
Look at the illiquidity premium in detail. Its size depends on the period, the segment and the measurement method; alongside the lock-up of capital, leverage, company size and manager selection also contribute to the historical excess return. That is precisely why the strategy and track record of the individual fund are worth a look.
Valuation smoothing distorts the metrics. NAV series rest on slowly adjusted estimates; reported volatility and correlation with equities come out lower than the economic fluctuation. If you model allocations, un-smooth the series or add listed proxies — then the diversification effect holds in the model as well. And whether you buy or redeem, you do so at the valuation as it stands, which can reflect market moves in both directions with a delay (see Valuation & NAV).
Evergreen does not fully replace vintage diversification. The traditional approach spreads money across vintage years; an evergreen is fully invested from day one — in an existing portfolio whose valuation sets your entry NAV.
Choose the position size with the whole portfolio in view. Rebalancing is possible less often than with listed investments; if the liquid positions in the portfolio fall, the private markets share rises arithmetically (denominator effect). Plan for it and it will not catch you out.
The toolkit is bigger than the gate. Prospectuses combine redemption frequency, notice period, lock-up, redemption discount, swing pricing, side pockets and suspension — plus credit lines and the netting of new subscriptions against redemptions. It is worth reading in which order and with how much discretion they may be used; that is exactly where funds differ (liquidity management tools in detail).
The mechanism has already been through its practical test. From the end of 2022 the US real estate fund BREIT met redemptions pro rata over months — exactly as the fund documents provide: as orderly protection for all investors instead of a race for the exit (the BREIT case in the gating chapter).
Four metrics that make an evergreen factsheet readable at all. The net exposure ratio: what share of NAV sits in private markets assets (look-through, including irrevocable commitments), and what share in the liquidity sleeve? Two funds with an identical strategy and a 10% versus 25% sleeve are different products. The sleeve share in relation to the redemption terms: the ELTIF RTS (Del. Reg. (EU) 2024/2759, Annexes I/II) tie redemption frequency, notice period and minimum liquidity together in tabular form — which lets you test whether a fund can cover its redemption promise structurally or depends on inflows. Notice periods shorter than three months have to be justified by the manager to the supervisor (Art. 5(8)). The fee base: management fee on NAV (sleeve included) plus performance fee — what matters is the hurdle, the high-water mark, and whether the performance fee is charged on realised or unrealised gains; the latter also rewards mere valuation success. The deployment mechanics: how quickly is new money invested (ramp-up history), are there subscription queues, how are subscriptions netted against redemptions — up to matching mechanisms that transfer shares between investors leaving and investors joining — and does the fund publish the execution rate for each redemption date?
Typical misreadings. Over-reading young evergreen track records: many vehicles started with a small, hand-picked seed portfolio; the first few years are rarely representative. And ignoring the Morningstar findings: in 2025 only 4 of 19 rated semi-liquid funds received a Medalist Rating of “Bronze” or “Silver”, and only 16% of the advisers surveyed described themselves as very familiar with the structure — product knowledge is a genuine bottleneck (Morningstar, 2026). For further reading: Zeisberger/Prahl/White (“Mastering Private Equity”, Wiley 2017), Phalippou (“Private Equity Laid Bare”) and Ilmanen (“Investing Amid Low Expected Returns”, 2022).
A fund for unlisted assets (private equity, private credit, infrastructure, property) with no fixed term, which issues shares regularly at NAV and redeems them at set dates within limits — positioned between an ETF (tradable at any time) and a closed-end fund (no exit for 10+ years). Typical features: quarterly redemptions with a notice period and a gate of around 5% per date.
ELTIFs are regulated (EU regulation, depositary, supervision) — that protects you against fraud, not against losses. The assets can fall in value, the NAV is an estimate, and in periods of stress redemptions can be capped or suspended — as happened to individual products in Europe in 2025 (Scope, 2026). The right question is not “safe?” but: do the capital lock-up and the risk of fluctuation suit you?
In the normal case, several weeks to around half a year pass between giving notice and payment, depending on the fund (notice period plus redemption date). If too many investors want out at once, the gate takes effect and payment is stretched across several dates. There is no guaranteed payment date.
“Evergreen” describes the structure (unlimited term, continuous subscription and redemption), “ELTIF” an EU legal framework. Many ELTIFs are evergreens, but not all — and many evergreens are not ELTIFs but, for instance, Luxembourg Part II funds. Only the ELTIF has an EU-wide distribution passport for retail investors.
Considerably more than an ETF: a management fee on NAV plus, often, a performance fee — on average across the segment, around 3% p.a. in ongoing costs, with performance fees not fully counted in (Morningstar, as at 2026). Depending on the distribution channel, entry charges come on top; the costs for each fund are in our database.
Then the gate takes effect: redemption orders are executed only up to the cap, usually cut back pro rata; the remainder rolls into the next date or has to be resubmitted. In extreme cases redemptions are suspended altogether. The gate is the built-in protection for the investors who stay (details in the gating chapter).
Last reviewed: 16 Oct 2026 · Methodology · Not investment advice.