For years, the pitch from the private markets industry to everyday investors has had a familiar ring: endowments and pension funds have been doing this for decades, so why shouldn’t you? On September 30, Reuters reported that SEC Chair Paul Atkins is unveiling a new set of proposals aimed at widening retail access to private assets, a category that spans private equity, private credit, real estate and venture capital. The door is opening. The more useful question is what the room looks like once you’re inside, and how easily you can leave it.
What the SEC is putting on the table
According to Reuters, the package has three pieces. The first would let investment advisers charge performance fees to retail clients based on capital gains, something that has been limited to so-called qualified clients who meet net worth thresholds. The second would modify redemption rules for closed-end funds and share class offerings, with the stated aim of improving retail access to private assets. The third is a notice asking whether certain certifications and credentials should qualify individuals as accredited investors.
The administration’s framing, as Reuters describes it, is that private assets can be democratized and may offer higher returns than a traditional portfolio. Critics see it differently. Reuters notes the argument that the effort benefits Wall Street at the expense of retail investors, because private assets are hard to price and cannot be easily redeemed. Jeff Judge of Chesapeake Financial Planners put the fee issue plainly: “An adviser paid a share of gains has a reason to reach for risk, so I’d want strong valuation policies and informed client consent.”
His concern deserves a moment. Performance fees are common in private funds, and supporters argue they align the manager’s interests with the investor’s. The tension is that when holdings are valued by the manager or a model rather than a public market price, the person setting the number may also be the person paid on it. That doesn’t make anyone dishonest. It does mean the quality of valuation policies, audits and disclosure matters more here than it does with a fund holding stocks that trade every second.
Worth remembering: these are proposals. They typically go through public comment before anything becomes final, and the details can change along the way.
The retirement account angle
This isn’t the first move in the campaign. On March 30, the Department of Labor announced a proposed rule on how 401(k) plan fiduciaries choose investment options, published in the Federal Register the next day. It grew out of an August 2025 executive order on alternative assets, though law firm Morgan Lewis notes the rule applies to investment types broadly. It does not tell a plan to add private assets. It describes a process.
Under the proposal, a fiduciary who objectively weighs six factors gets a presumption of prudence. Those factors are performance, fees, liquidity, valuation, benchmarks and complexity. Read that list again. Two of the six, liquidity and valuation, are precisely the pressure points that private funds have had to answer for this year. Deputy Secretary of Labor Keith Sonderling said in the department’s release, “The department’s days of picking winners and losers are over,” adding that managers must evaluate potential offerings through a prudent process. The comment deadline was June 1, and the proposal leaves the question of ongoing monitoring to separate guidance.
What the redemption queue taught us
If you want to know why regulators and advisers keep circling liquidity, look at what happened to the semiliquid funds that already sell to individuals. A March report in WealthManagement put semiliquid fund assets at more than $534 billion at the end of 2025. Then the exits got crowded.
Per that reporting, redemptions from non-listed business development companies nearly tripled in the fourth quarter of 2025 to 4.71% of net asset value. On February 18, Blue Owl closed quarterly redemptions on one of its funds, OBDC II. In the first quarter, Blackstone raised the redemption limit on its BCRED fund from 5% to 7.9%, while Cliffwater’s lending fund received requests covering about 14% of shares, roughly double its 7% quarterly cap. Those caps are not accidents. Interval funds must offer to repurchase at least 5% of shares each quarter, and BDCs typically offer 5% quarterly at the board’s discretion.
Harvey Schwartz, the CEO of Carlyle, said in January that “the industry did itself a bit of a disservice calling the vehicles semiliquid.” It’s a fair point. Semi, in this case, means the fund may return your money on a schedule it controls, not that you can count on it. Morningstar’s Brian Moriarty made a related observation: investors can’t short these funds, so pulling out is the only way to express a negative view.
Not everyone reads the run as a warning. Omar Qureshi of Hightower Signature Wealth compared some of the requests to the toilet paper hoarding of the early pandemic, calling massive redemption requests irrational. Maybe so. But a fund that behaves as designed and still leaves you waiting is a design worth understanding before you commit money you might need.
Alternatives is not one thing
The scale here is not small. A Morningstar PitchBook report, cited by WealthManagement in July, counted 567 U.S. evergreen funds with about $607 billion in assets as of March 31, 2026 (a broader universe than the semiliquid figure above). What stands out inside those numbers is the spread. Over three years, the best alternative credit fund in the data returned 34.2% and the worst lost 7.0%. In private equity the best returned 23.4% and the worst lost 65%. Year to date through April, the report’s evergreen fund index was up 1.6%, compared with 7.4% for 2025, and real estate funds saw about $300 million in net outflows over the trailing twelve months.
Past results tell you nothing about what comes next, and a single report is one snapshot. Still, a gap that wide between the best and worst funds in the same category says something. Buying “private credit” or “private equity” as a label tells you very little. The manager, the fee stack, the valuation practices and the exit terms do most of the work.
Questions worth asking before the door swings wider
If more of these products land in front of retail investors, the burden of homework lands with them too. Some questions are worth asking of any private or semiliquid vehicle. How often can you redeem, and what happens if too many people ask at once? Who sets the value of the holdings, and how often does that value change? What are the total costs, including any performance fee layered on top of management fees? How much of your overall portfolio would this occupy, and could you live without that money for years?
None of those questions is hostile to alternatives. Private markets can play a real role in a diversified portfolio, and plenty of thoughtful investors use them. The point is that access and suitability are different things. Regulators can open the door. Nobody else can tell you whether you should walk through it, and nobody should hurry you.
Watch how the SEC proposals develop, what the final Labor Department rule says about liquidity and valuation, and whether the fund industry rewrites its own terms after this year’s redemption stress. Those details will shape what retail access actually means far more than the slogans do.
This article is written for educational and informational purposes only and does not constitute financial or legal advice. The views and analytical frameworks presented draw on publicly available information and reported commentary from industry participants. Readers are encouraged to consult primary sources and form their own informed views on these complex topics.
