Private Markets Evolution: Insights on Fund Structures and Innovation

David Rochford

Global Head of Public Markets

Private markets are on a continued trajectory towards broader participation. This evolution includes innovative approaches that raise unique dynamics for market participants, including those traditionally focused on public market funds.

This has been a core theme of recent discussions, including my conversation with Gavin Byrnes, Chairperson and Independent Non-Executive Director of MUFG Alternative Fund Services (Ireland) Limited. I had the pleasure of hosting him on an MUFG Alt Insider Podcast episode, “Unlocking Alternatives: The Democratization of Private Markets.”

Public & Private Markets: No Longer Distinct Conversations

The potential for increased returns and portfolio diversification is contributing to an increasing number of traditional asset managers, high-net-worth investors and retail investors turning to private markets. Notably, private equity and private credit returns have been generally outpacing public market benchmarks, and we have seen a rise in the number of complex semi-liquid structures launched across key domiciles.

During our podcast, Gavin and I spoke about what’s driving these market shifts, the operational risks involved, and what success may look like in the future. We dove into the progression of fund structures and of course, innovation. Gavin shared his perspective and below are key insights I took away from our discussion.

Democratization is driven by both need and demand.

“We are at the point now where the stars have aligned somewhat,” Gavin explained. “There is a need with managers to raise capital from alternative sources and there is an appetite from investors to buy those products, as long as they are curated in the right way.” Asset managers continue to look for sources of funding beyond traditional institutions, while qualified retail investors increasingly seek access to private markets. Market maturity has aligned these forces, pushing both sides to consider new fund structures and distribution models.

Fund structuring involves a balancing act among access, liquidity, and returns.

Semi-liquid or evergreen funds, continuation funds, and hybrid portfolio approaches are expanding access to private markets. However, these complex structures cannot directly replicate institutional commitment drawdown-based products without trade-offs. Gavin highlighted that increased liquidity often results in return dilution, and reminded listeners that careful pre-launch structuring, along with transparent investor communications, are baseline requirements.

Operational enablement and partnerships are important components of product strategy.

As the lines blur between public and private markets, evolving fund structures and innovation may unintentionally create friction points when the complexity required to operationalize these changes is underestimated. “This is the part of the jigsaw that people overlook probably the most,” Gavin remarked. He added that end-to-end enablement requires careful consideration, to help ensure systems and expertise are in place to support alternative investments. Standout investor servicing, KYC/AML and other operational requirements require scalability, proven systems, and trusted providers.

This theme of operational readiness resonated throughout the podcast discussion. Private market firms are increasingly partnering with traditional asset management houses, platforms, and service providers to access scale, distribution, and operational capabilities. As Gavin and I noted, effective collaboration with seasoned providers is becoming a differentiator across the ecosystem. At MUFG Investor Services, our customized solutions and deep experience across open- and closed-ended funds help ensure that workflow tools and systems are in place to support diversified portfolios and complex fund structures.

Unsurprisingly, technology will continue as a long-term game changer.

“Technology is more than an asset management trend,” Gavin stated, underscoring that the pathways through which managers access alternatives will inevitably change. For example, tokenization and artificial intelligence (AI) have the potential to fundamentally alter how investment strategies reach end investors. Over the next five to ten years, technological advancements will no doubt unlock further efficiencies across markets.

For more insight, listen to the full podcast episode.