Politicians, investors, and investment managers have begun advocating for the expansion of retail investor access to private markets, despite uncertain implications for individual financial opportunities and outcomes. We study private market investment vehicles that have recently become available to all retail investors: closed-end funds of private funds (CE-FOPFs). In August 2025, the SEC made accreditation requirements on CE-FOPFs optional. We examine the characteristics and performance of these private-market-exposed securities. We show that there has been significant growth in the amount of capital allocated to CE-FOPFs, particularly those with a private equity focus, resulting in CE-FOPFs holding over $80 billion in net assets by the end of 2025. In terms of performance, CE-FOPFs appear to provide some diversification benefits and positive risk-adjusted returns. However, they have underperformed public and private market benchmarks during our sample period, even before accounting for (often high) transaction fees. Finally, we document early descriptive evidence on the funds that have switched off accreditation requirements to cater to retail investors.
Andrew Glover, University of Washington
Oscar Halliwell, University of Washington
Rui Silva, University of Washington