---
title: "Semi-Liquid Fund | Altss Glossary"
description: "A semi-liquid fund is an evergreen vehicle holding mainly illiquid private assets that offers limited periodic liquidity, typically quarterly repurchases…"
canonical: "https://altss.com/glossary/semi-liquid-fund"
---

Glossary · Fund / vehicle structure

# Semi-Liquid Fund

Also called: semi-liquid vehicle · periodic liquidity fund

A semi-liquid fund is an evergreen vehicle holding mainly illiquid private assets that offers limited periodic liquidity, typically quarterly repurchases capped at a small percentage of shares or NAV, which can be prorated and, under some wrappers, suspended.

Publisher: Altss LLCContent modified 2026-10-02

ALTSS-STRUCT-010

Semi-liquid funds are a common route for wealth-channel investors into private equity, private credit and real estate. Investors can usually ask for some money back every quarter, but the fund promises to buy back only a slice of its shares each time. If many investors ask at once, each receives part of what it requested.

## Classification: the main wrappers

**[Interval fund](https://altss.com/glossary/interval-fund)** (US). A registered closed-end fund with a fundamental policy to make repurchase offers every three, six or twelve months for 5% to 25% of outstanding shares under Rule 23c-3. Offers are mandatory; if requests exceed the offer, the fund may buy up to a further 2% of outstanding shares and must otherwise prorate (with limited exceptions in the rule). Usually continuously offered and open to retail investors.

**Tender offer fund** (US). A registered closed-end fund, usually unlisted, whose board may make issuer tender offers under Rule 13e-4, commonly quarterly. Offers are discretionary. Often limited to accredited investors.

**Non-traded [BDC](https://altss.com/glossary/business-development-company)** (US). A closed-end company electing BDC status that invests mainly in private US companies, commonly in direct lending, and offers quarterly tender offers. Subject to BDC asset coverage rules.

**Non-traded REIT** (US). A REIT whose shares are not listed, offering a share repurchase plan with monthly or quarterly limits that the board can change or suspend.

**Unregistered evergreen funds** (US and offshore). Private funds under 3(c)(1) or 3(c)(7) with periodic redemption rights, notice periods and gates.

**EU and UK.** [ELTIFs](https://altss.com/glossary/eltif) with a redemption policy under ELTIF 2.0 and its 2024 technical standards; Luxembourg Part II undertakings for collective investment (UCIs); the UK LTAF.

## Investor base

Semi-liquid funds are built for the wealth channel: high-net-worth individuals through private banks, wealth managers and [RIAs](https://altss.com/glossary/registered-investment-advisor). Interval funds, and non-traded REITs and BDCs that register their offerings under the Securities Act, are commonly sold to retail investors; tender offer funds and private evergreen funds are usually limited to [accredited investors](https://altss.com/glossary/accredited-investor). Where an SEC-registered adviser charges a performance fee to a registered fund, a BDC or a 3(c)(1) fund, each investor charged the fee is treated as a client who must generally be a [qualified client](https://altss.com/glossary/qualified-client) (Rule 205-3(b)). Institutions use the same vehicles less often, preferring drawdown funds.

## Liquidity mismatch and how funds manage it

Assets are illiquid; liabilities to investors are quarterly. Funds manage the gap with a cash and liquid-credit sleeve, income from the portfolio, credit facilities, early-repurchase fees in the first year, caps and proration, and, as a last resort, the right to limit or suspend repurchases (narrower for interval funds). In stress, requests can exceed caps for several consecutive quarters. The International Monetary Fund's April 2024 Global Financial Stability Report names growing semi-liquid vehicles among the vulnerabilities of private credit. In the EU, the manager of a semi-liquid fund set up as an open-ended alternative investment fund (AIF) must select at least two liquidity management tools from the list in the 2024 amendments to the Alternative Investment Fund Managers Directive (AIFMD II), which apply from 16 April 2026 through national transposition.

## Valuation and fees

Investors subscribe and exit at NAV, so NAV accuracy transfers value between entering, staying and leaving investors. Registered funds and BDCs determine fair value under Rule 2a-5 with board oversight. Fees are charged on NAV; many semi-liquid funds also charge a performance fee or allocation, often with a hurdle and high-water mark.

## Pending US proposals

On 30 September 2026 the US Securities and Exchange Commission (SEC) proposed changes aimed at retail access to private markets, including modernising interval fund repurchase scheduling, a rules-based framework for multiple share classes of regulated closed-end funds, and expanding the ability of registered advisers to receive performance-based compensation from certain clients, including regulated funds. Comment periods run for 60 days after publication in the Federal Register. These are proposals only and are not in force.

## Worked example

### Illustrative quarterly repurchase with proration

A fund with 20m shares outstanding offers to repurchase 5% (1m shares). Requests total 1.6m shares. If, as Rule 23c-3 allows an interval fund, it also repurchases up to a further 2% of outstanding shares (0.4m shares), it buys back 1.4m shares and each requesting investor receives **87.5%** of its request; otherwise each receives **62.5%**. Rule 23c-3 makes no provision for carrying the unfilled balance forward, so an investor that still wants it repurchased tenders again at the next offer.

Examples are illustrative; figures are not market data.

## Not the same as

- [Open-End Fund](https://altss.com/glossary/open-end-fund): An open-end fund issues redeemable securities; most US semi-liquid funds are legally closed-end and offer repurchases, not redemptions.

- [Evergreen Fund](https://altss.com/glossary/evergreen-fund): Evergreen describes no fixed term; semi-liquid describes a specific liquidity pattern within evergreen funds.

- [Closed-End Fund](https://altss.com/glossary/closed-end-fund): A closed-ended drawdown fund offers no periodic liquidity; a semi-liquid fund offers limited periodic liquidity.

## How it is classified

- Mandatory periodic repurchase offers of 5% to 25% under a fundamental policy: interval fund.

- Discretionary board-approved issuer tender offers: tender offer fund (or non-traded BDC if it has elected BDC status).

- Share repurchase plan in a non-listed REIT: non-traded REIT.

- Contractual redemption right with gates in an unregistered fund: private open-ended (evergreen) fund.

- Label all of the above "semi-liquid" only when underlying assets are mainly illiquid and liquidity is capped and periodic.

## Common mistakes

- Treating quarterly liquidity as a guarantee. Caps and proration apply even in normal markets when requests are high.

- Assuming interval funds and tender offer funds work the same way. Interval fund offers are mandatory; tender offers are at the board's discretion.

- Comparing semi-liquid fund returns, which are time-weighted on NAV, with closed-end fund IRRs.

## Edge cases

- Some semi-liquid funds invest through closed-end underlying funds and secondaries, so their own liquidity depends on distributions they do not control.

- Share classes with different fees and distribution channels can exist within one vehicle; the SEC's 2026 proposal addresses this for regulated closed-end funds.

## Sources

- [17 CFR 270.23c-3 - Repurchase offers by closed-end companies (interval funds)](https://www.law.cornell.edu/cfr/text/17/270.23c-3). U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror), eCFR current as of 2026-09-29; last amended 2021-08-01. Status: in force (checked 2026-10-01). 17 CFR 270.23c-3(a)(1), (a)(3), (b) introductory text, (b)(2)(i), (b)(3)(i), (b)(5) — supports: Interval fund periodic intervals and 5% to 25% repurchase offer amount under a fundamental policy; suspension or postponement only by a board vote in listed circumstances; additional repurchase of up to 2% of outstanding shares, otherwise pro rata with limited exceptions; no carry-forward provision

- [17 CFR 240.13e-4 - Tender offers by issuers](https://www.law.cornell.edu/cfr/text/17/240.13e-4). U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror), eCFR current as of 2026-09-29; last amended 2019-01-14. Status: in force (checked 2026-10-01). 17 CFR 240.13e-4(a)(2), (f)(1) — supports: Issuer tender offer definition; minimum offer period

- [15 U.S.C. 80a-60 - Capital structure (Investment Company Act sec. 61, BDC asset coverage)](https://www.law.cornell.edu/uscode/text/15/80a-60). U.S. Congress (United States Code; LII mirror), Current US Code; sec. 61(a)(1)-(2) added by Pub. L. 115-141, div. S, title VIII, sec. 802 (2018-03-23, Small Business Credit Availability Act). Status: in force (checked 2026-10-01). Sec. 61(a)(1)-(2) — supports: BDC asset coverage of 200%, or 150% with approval

- [17 CFR 270.2a-5 - Fair value determination and readily available market quotations (Rule 2a-5)](https://www.law.cornell.edu/cfr/text/17/270.2a-5). U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror), eCFR current as of 2026-09-29; last amended 2021-03-08 (effective date of adoption). Status: in force (checked 2026-10-01). 17 CFR 270.2a-5(a)-(b); definition of 'fund' — supports: Fair value determinations for registered investment companies and BDCs

- [Commission Delegated Regulation (EU) 2024/2759 supplementing Regulation (EU) 2015/760 (ELTIF RTS)](https://eur-lex.europa.eu/eli/reg_del/2024/2759/oj/eng). European Commission, Official Journal of the EU, L series, 25.10.2024, Adopted 19 July 2024; entered into force the day after publication (26 October 2024). Status: In force (checked 2026-10-01). Recitals (3)-(9); provisions under Regulation (EU) 2015/760 Art. 18(6); Art. 13 — supports: ELTIF redemption policy and liquidity management standards, in force 26 October 2024

- [Directive (EU) 2024/927 amending Directives 2011/61/EU and 2009/65/EC (AIFMD II)](https://eur-lex.europa.eu/eli/dir/2024/927/oj/eng). European Parliament and Council, Official Journal of the EU, L series, 26.3.2024, Adopted 13 March 2024; Member States to adopt and apply measures by 16 April 2026 (some reporting provisions later). Status: In force; transposition deadline passed 16 April 2026; national transposition status varies by Member State (checked 2026-10-01). Art. 1(8) (inserting Directive 2011/61/EU Art. 16(2b)); Art. 1(27) and Annex II (new Annex V points 1-9); Art. 3(1) — supports: A manager of an open-ended AIF selects at least two liquidity management tools from Annex V points 2-8, not swing and dual pricing alone (one tool for a money market fund); applies from 16 April 2026 as transposed

- [Global Financial Stability Report, April 2024, Chapter 2: The Rise and Risks of Private Credit](https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2.pdf). IMF staff (team led by Caio Ferreira and Nobuyasu Sugimoto), International Monetary Fund, April 2024 GFSR ("The Last Mile"), published 16 April 2024. Status: Published (checked 2026-10-01). Chapter 2 at a Glance, p. 53; p. 62 — supports: A growing share of semiliquid investment vehicles listed among private credit vulnerabilities

- [SEC Proposes Amendments to Expand Responsible Retailization of Private Markets (press release 2026-96)](https://www.sec.gov/newsroom/press-releases/2026-96-sec-proposes-amendments-expand-responsible-retailization-private-markets). U.S. Securities and Exchange Commission, 2026-09-30. Status: proposed (checked 2026-10-01). Press release 2026-96 (30 September 2026) — supports: Proposals: expand performance-based compensation for registered advisers from certain clients including regulated funds; modernise interval fund repurchase scheduling; rules-based framework for multiple share classes of regulated closed-end funds; 60-day comment periods after Federal Register publication

- [What is a REIT? / How to Form a REIT](https://www.reit.com/what-reit/how-form-reit). Nareit, Web pages accessed 2026-10-01. Status: Current (checked 2026-10-01). Types of REITs — supports: Public non-listed REITs as a REIT category

- [Regulation (EU) 2023/606 amending Regulation (EU) 2015/760 (ELTIF 2.0)](https://eur-lex.europa.eu/eli/reg/2023/606/oj/eng). European Parliament and Council, Official Journal of the EU, L 80, 20.3.2023, Adopted 15 March 2023; applies from 10 January 2024. Status: In force (checked 2026-10-01). Art. 1(10) (replacing Regulation (EU) 2015/760 Art. 18(2)) — supports: ELTIF redemptions during the fund's life under a redemption policy, on conditions

- [15 U.S.C. 80a-2 - Definitions (Investment Company Act sec. 2, incl. 2(a)(48) BDC and 2(a)(51) qualified purchaser)](https://www.law.cornell.edu/uscode/text/15/80a-2). U.S. Congress (United States Code; LII mirror), Current US Code text as published by LII (accessed 2026-10-01). Status: in force (checked 2026-10-01). Sec. 2(a)(48) — supports: A BDC is a closed-end company

- [17 CFR 275.205-3 - Exemption from the compensation prohibition of section 205(a)(1) for investment advisers (qualified client)](https://www.law.cornell.edu/cfr/text/17/275.205-3). U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror), eCFR current as of 2026-09-29; last amended 86 FR 62475 (2021-11-10). Status: in force (checked 2026-10-01). 17 CFR 275.205-3(b) — supports: Each equity owner of a private investment company, registered investment company or BDC charged a performance fee is treated as a client

- [15 U.S.C. 80a-3 - Definition of investment company (Investment Company Act sec. 3, incl. 3(c)(1) and 3(c)(7))](https://www.law.cornell.edu/uscode/text/15/80a-3). U.S. Congress (United States Code; LII mirror), Current US Code text as published by LII (accessed 2026-10-01). Status: in force (checked 2026-10-01). Sec. 3(c)(1), 3(c)(7)(A) — supports: Exclusions relied on by unregistered evergreen funds

## Related terms

6 terms

- [Business Development Company (BDC)](https://altss.com/glossary/business-development-company)

- [European Long-Term Investment Fund (ELTIF)](https://altss.com/glossary/eltif)

- [Redemption Gate](https://altss.com/glossary/gates)

- [Liquidity Sleeve](https://altss.com/glossary/liquidity-sleeve)

- [Evergreen Fund](https://altss.com/glossary/evergreen-fund)

- [Interval Fund](https://altss.com/glossary/interval-fund)

## Referenced by

6 terms

- [Alternative Investments (Alternative Assets)](https://altss.com/glossary/alternative-assets)

- [Closed-End Fund](https://altss.com/glossary/closed-end-fund)

- [Open-End Fund](https://altss.com/glossary/open-end-fund)

- [Private Capital (Private Markets)](https://altss.com/glossary/private-capital)

- [Registered Investment Adviser (RIA)](https://altss.com/glossary/registered-investment-advisor)

- [Time-Weighted Return (TWR)](https://altss.com/glossary/time-weighted-return)

## Concept record

Concept ID

ALTSS-STRUCT-010

Classification

Fund / vehicle structure

Topics

Fund structures

Version

2.0.0

Last reviewed

2026-10-02

Structured data

[JSON](https://altss.com/reference/concepts/semi-liquid-fund.json)

Source check

Legal and regulatory statements checked against the cited primary sources on 2026-10-02 ([how](https://altss.com/methodology)). General information, not advice.

## Canonical URL

https://altss.com/glossary/semi-liquid-fund