Private Funds & Qualified Investors
Can a private fund holding many illiquid assets be set up as an open-end fund?
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Under the 2021 reform, private funds with a high proportion of non-marketable assets for which no market price is available can no longer be set up as open-end funds that allow redemption at any time.
Under the subordinate regulations, a fund must be set up as closed-end if assets without an exchange market price, excluding those readily convertible to cash, exceed 50%. This safeguard is meant to prevent redemption crises caused by mismatches between the fund's maturity and the maturities of its assets.
This answer is general financial information as of 2026-10-14, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.