The Rise of ‘Illiquid-Asset’ and ‘Liquid-Asset’ Hybrid funds in Private Markets

14 September 2023 - The prevalence of Private Markets Hybrid Funds – a mix of closed- and open-ended structures – has doubled over the past two years as GPs seek new sources of capital, according to the Citco group of companies (Citco), a leading provider of asset-servicing solutions to the global alternative investment industry.

A significant shift has taken place among Citco’s Private Markets client-base: its mix of funds serviced has moved from approximately 80% Private Equity/ 20% Private Credit or Hybrid Funds in H1 2021, to approximately 60% Private Equity/ 40% Private Credit or Hybrid Funds in H1 2023.

However, as the term ‘Hybrid’ itself is still relatively opaque, Citco believes there are two broad buckets within Hybrids based on their relative liquidity, which it defines as ‘Illiquid-Asset’ and ‘Liquid-Asset’ Hybrid Funds.