Fuse Blog

The Rise of Private Equity in Unlisted CEFs

  • Through the first three quarters of 2021, assets under management for private equity-focused unlisted closed-end funds (CEFs) have seen the largest increase in AUM of any asset class. As of 3Q21, assets grew to $16.1B from $10.3B as of year-end 2020, representing an increase of $5.8B, or 56%. While the majority of private equity asset growth is attributable to Tender Offer funds, Interval funds relative to their size have seen the most growth, with AUM increasing 151% in the first three quarters of 2021.
  • Despite asset growth, private equity fund launches have been relatively slow in 2021, with only one fund introduced in the first quarter, bringing the total number of live funds to 26. That said, in the third quarter firms started to take notice with eight funds entering registration. Should the trend continue, we expect the fourth quarter will witness more new registrants and even some new launches.
  • A strong increase in demand among investors for alternative offerings has been driving the rapid growth. Also, with minimum investments often being significantly less than strategies offered by wealth management firms, private equity unlisted CEFs are becoming increasingly more popular among investors. Additionally, further fueling the growth is greater advisor education about the asset class and the investment vehicles.

Unlisted CEF Private Equity Assets, 2014-3Q21 ($ Millions)

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Source: SEC Filings, FUSE Research Analysis