From Lock‑Up to Liquid: How Fund Structures Are Evolving to Win LP Trust.
Executive Summary
Fund managers are rewriting the rulebook. The old divide—closed-end funds with long lockups vs open-end funds with constant liquidity—is blurring. In response to LP demands, managers are adopting hybrid, semi-liquid, and evergreen vehicles, reshaping how alternative capital is raised and deployed. For strategic investors, this shift opens up access, optionality, and alignment in new ways.
What’s Happening?
Closed‑end managers are incorporating liquidity windows, redemption gates, and periodic redemptions to appease LP demands. (rbsinternational.com)
Open-end / evergreen funds (no fixed end date) are rising in popularity for alternatives—offering continuous capital deployment and redemption flexibility. (Preqin)
Fee models and governance terms are evolving: managers offer optional fee bases, clawbacks, and more transparent structures to attract LP capital. (privatecapitalsolutions.com)
LPs are pushing GPs for greater alignment, liquidity, and disclosure. (Preqin)
In short: the old fund forms are under pressure. Investors want flexibility + discipline.
Why It Matters for Investors
Access with optionality
You can commit to strategies traditionally locked up, but now with the possibility of periodic exit. That reduces risk.Better alignment
When GPs adopt flexible terms or optional fee models, LPs win from alignment, not just from blind trust.Diversification into alternatives becomes easier
Liquid-ish structures and lower minimums make alternative strategies (credit, infrastructure, aviation-backed funds) more accessible.Redeployment speed & agility
A manager can recycle capital or respond to market shifts faster, without waiting for the lifecycle exit.
What’s Next?
Expect more hybrid vehicles: funds that blend closed‑end scale with open‑end flexibility.
Fee innovation will continue: performance-based, flexible bases, and clawbacks will become standard, not optional.
GPs that fail to adapt may struggle to raise future capital, especially from sophisticated LPs.
Greater disclosure, transparency, and reporting will become non-negotiable.
Join Jasmine Blue Capital
We’re not just observers — we build with the new rules in mind. Our fund structures (Lux + Singapore) anticipate LP demands: liquidity optionality, alignment, and transparency built in.
📩 Let’s talk about how you can invest in aviation, infrastructure, or alternative credit through cutting-edge fund formats — and not get trapped by legacy lockups.