Davis Polk partner Chris Healey was featured in a Q&A by Fund Board Views discussing the growing trend of opening private investment opportunities to retail investors.

When asked why there is a push now to give retail investors easier and more access to private markets, Chris listed three reasons: “1. Companies are staying private for longer (if they go public at all), and investors often interact with or hear about certain private companies in their daily lives and wonder how they can invest in them. 2. The growth of defined contribution plans/401(k)s, where there are few—if any—options to invest in private markets, means fewer investors have exposure to private markets investments through their retirement accounts. 3. Investment managers focused on private markets investments are looking to continue to grow by raising money from new pools of capital and previously had not made their funds available to… individuals who write smaller checks.”

Chris also noted that there are a variety of considerations to keep in mind for various private funds. He said, “While many private markets strategies have overlapping considerations for boards (e.g., valuation challenges), there are some different considerations for private credit, private equity, and secondaries strategies. For example, … Private equity and secondaries strategies may present specific liquidity challenges for funds that seek to offer retail investors periodic liquidity. It is important for a board to understand the challenges that can arise during the lifecycle of individual investments.”

Discussing the balance of investor access and liquidity needs in retail-friendly structures, Chris said, “Setting aside any SEC or Congressional actions that could expand investor access to private markets, there are some things that the industry could do to make it easier for investors to invest in these types of regulated funds. Some types, particularly interval funds that strike a daily NAV, are available for daily “point and click” subscriptions, while others (especially BDCs) require more cumbersome subscription documents and monthly or quarterly subscriptions. … In terms of liquidity, while individual funds from time to time may face a liquidity crunch, the most common liquidity program in private markets fund products to date has been a share repurchase program where the fund offers to buy back up to 5% of outstanding shares each quarter; that seems to have been sufficient in most circumstances for investors and intermediaries to be comfortable.”

“Q&A: Opening the private markets door to retail investors,” Fund Board Views (July 11, 2025) (subscription required)

Copy link to share post