As the SEC pushes to open historically exclusive private markets to regular investors, prominent wealth managers are questioning whether more access is actually needed.
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Recent changes at the Securities and Exchange Commission have already removed criteria limiting many private investments to so-called accredited investors who meet certain net worth and income requirements. David Krakauer, vice president of portfolio management at Mercer Advisors, said the changes mean virtually everyone can now invest in mutual funds and other funds with underlying holdings made up of private equity, private credit and other alternatives through SEC-registered interval funds.
Such funds are specially designed to make private investments more liquid by letting investors make periodic withdrawals of their money.
“Private equity, private credit, private real estate — anyone can buy into that through the interval fund space,” Krakauer said. “There are lots of better options now than there were, even like a year and a half or two years ago.”
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Morgan Stanley, Envestnet use interval funds to provide more access
Krakauer’s comments were echoed by Alison Nest, the head of investment solutions products at Morgan Stanley, which recently opened up two of its private markets and alternatives funds, or PMAX funds, to regular investors by registering them with the SEC.
Previously, investors in PMAX-Balanced — which holds investments in private equity, private credit, real estate and infrastructure — had to meet the criteria for accredited investors. That is, they had to have at least $1 million in assets (excluding their houses) and an annual income of at least $200,000 for the past two years for single earners and $300,000 for married couples.
Recent regulatory changes and the fund’s SEC registration have made those qualifications a thing of the past.
“Many of the underlying private market opportunities we invest in continue to have higher eligibility requirements,” Nest said. “But innovative investment structures, such as what we’ve done with PMAX and this tender solution, have made it possible to package those opportunities into a vehicle that can serve more investors.”
Similarly, the financial tech firm Envestnet announced Thursday that advisors it works with can now access a host of interval funds investing in private markets. Envestnet said last year that it had enlisted asset managers like BlackRock, Fidelity Investments and Franklin Templeton to provide alternative investments to its RIA clients, which can then in turn offer them to investors.
Like Morgan Stanley, Envestnet is positioning itself as an expert that can help investors navigate the sometimes opaque and risky world of private markets.
“Interval funds are a relatively new investment vehicle wrapper, and advisors and investors placing money into these products for private markets exposure understandably need assurances that everything looks good, and that risks or concerns are addressed,” Todd Rais, Evestnet head of investment products and services, said in a statement.
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SEC has already taken steps to open up private markets
The SEC registrations of funds like Morgan Stanley’s PMAX are the direct result of a recent change in regulatory policy. SEC Chairman Paul Atkins announced last year that regulators were ending a policy that for more than two decades had placed strict limits on closed-end funds’ ability to access private markets on behalf of retail investors.
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Previously, closed-end funds — which offer only a set number of shares for investors to buy and sell on public exchanges — had been able to put no more than 15% of their total allocations into private investments.
Now, because of the SEC’s change, “access has improved dramatically, whereas historically private markets were largely reserved for institutions and ultrahigh net worth investors,” Nest said.
Despite perceptions that private markets are no longer the exclusive preserve of the ultrawealthy, the SEC wants to do more to widen access. Just last week, it listed “Enhancing Retail Exposure to Private Markets” as one of 40 proposals in its “2026 Regulatory Agenda.” Among its objectives, the SEC said it’s seeking to “facilitate retail investor exposure to private markets through registered investment companies.”
In a statement on the agency’s 2026 Regulatory Agenda, SEC Chairman Paul Atkins returned to his oft-stated belief that private markets “should not be reserved for wealthy insiders.”
“Our agenda includes a proposal to better facilitate retail investor participation in private markets while preserving their protection with appropriate safeguards,” he said.
An SEC spokesperson declined to elaborate.
Christian Hennion, who represents asset and wealth managers from Katten Muchin Rosenman’s Chicago offices, said it’s clear from the SEC’s agenda that regulators think there are still barriers preventing regular investors from moving into private markets.
“I think the expectation there really is one to maybe help revise or loosen some of the constraints under the Investment Company Act that make it more complicated for these publicly offered funds to access private investments,” he said. “Maybe not impossible, but harder.”
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Despite withdrawal limits, private markets grow in popularity
Data from the research firm Morningstar supports the notion that retail investors have been piling into private investments in recent years. In a report called “The State of Semiliquid Funds 2026,” Morningstar found that the amount of money in funds designed to make private markets more accessible had swollen by 120% to nearly $600 billion over the past four years.
Private markets’ popularity has come despite barriers some investors have encountered to retrieving their money. Big asset managers like Blue Owl and BlackRock have enforced redemption limits in the past year, restricting investors’ ability to withdraw money from private credit funds they manage.
Critics of private investments also warn about high fees and a lack of transparency. Krakauer at Mercer said special attention should be paid to the “semiliquid” designation given to many interval funds and similar investment vehicles. Investors should never expect to be able to take all their money out at once.
“You need to have liquidity gates on the back end whenever you’re holding illiquid asset classes,” Krakauer said.
Although Morgan Stanley’s PMAX funds are no longer restricted to accredited investors, they still come with certain requirements. Investors must be able to put $10,000 in initially and then can add at least $5,000 in individual subsequent contributions. Morgan Stanley has the same limits for another recently registered fund: PMAX-Growth, which seeks larger returns from venture capital, private equity and similar investments.
Nest said clients’ liquidity needs are a primary consideration for advisors recommending PMAX or other types of private investments. In part, that’s because withdrawals from both PMAX-Balance and PMAX-Growth are restricted to once a quarter.
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Should private investments become more like public markets?
Calls to open up private investments have grown louder amid perceptions that public markets offer fewer opportunities to regular investors. The SEC has reported that the number of publicly traded U.S. companies fell from 8,000 in 1996 to 3,700 in 2024.
Jack Shannon, an expert on equity strategies at the research firm Morningstar, said he’s sympathetic to the SEC’s goal of expanding access to private markets. He said regulators could help assuage anxieties about alternative funds by requiring managers of private investments to report more on their asset holdings.
Of course, such a change would make private funds in some ways less distinguishable from publicly traded investments.
“But it’s one of those things where, if you want to reach a broader investor base, you’re going to necessarily have to give up some data, you’re going to have to share some information,” Shannon said. “No one’s forcing them to go this route. They could have stayed in the private fund world and been as opaque as they wanted to be.”
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