Morningstar said morningstar semiliquid fund assets approached $600 billion as of March 2026, while demand for private credit strategies cooled and capital moved toward private equity and venture capital. The shift leaves investors facing a category that has grown quickly enough to draw sharper scrutiny on fees, leverage and redemption terms.
Morningstar's $600 billion mark
$600 billion is the headline figure in The State of Semiliquid Funds 2026, released June 16, 2026. Morningstar said semiliquid, or evergreen, fund assets have more than doubled since 2022, turning a once-niche corner of private markets into a much larger part of the capital stack.
3% is the average expense ratio for semiliquid funds, while most allow quarterly withdrawals capped at 5%. Jason Kephart, senior principal at Morningstar, said, "The semiliquid market has scaled rapidly on the back of investor enthusiasm, but over the past year it has begun to collide with questions about how these structures actually behave in practice".
Private credit loses momentum
$8 billion in net inflows went to venture capital funds over the 12 months ended March 2026, while private equity funds drew $14.5 billion over the same period. That rotation came as private credit cooled sharply over the past year, with net assets in the category falling by roughly $1 billion in the first quarter of 2026.
19 semiliquid funds were rated by Morningstar last year, and only 4 received a forward-looking Medalist Rating of Bronze or Silver. Kephart said, "To effectively use private markets, we believe the focus should be on fundamentals, with investors taking a holistic view of how fees, leverage, and liquidity shape outcomes."
Blackstone's 401(k) fee choice
Blackstone recently introduced a structure for 401(k) plans that gives a choice between an incentive fee or a flat fee. That kind of menu reflects how managers are trying to widen access while keeping the economics flexible, but the Morningstar report still points to the same pressure points: high fees, redemption limits and the gap between marketing promises and how liquidity works when money moves faster than expected.
Kephart said, "Our independent research helps improve transparency and bring those trade-offs into focus." For investors, the practical question is no longer whether semiliquid funds are large enough to matter; it is whether the fee load and withdrawal limits match the role they are being used to play.
