Semi-Liquid Private Credit Moves Into the Mainstream

Morgan Stanley examines how semi-liquid fund structures are reshaping access to private credit and accelerating its adoption in wealth channels 

• Semi-liquid vehicles provide ongoing subscriptions and periodic redemptions, reducing capital-call friction and simplifying platform due diligence compared with closed-end drawdown funds.

• Private credit—now roughly a $3tn asset class—has led adoption, supported by contractual coupons, defined maturities and standardized valuation frameworks.

• Trade-offs include potential cash drag, liquidity sleeves, valuation complexity and gating mechanisms, requiring careful underwriting and investor alignment.

Does added liquidity enhance portfolio efficiency—or dilute the illiquidity premium? The full paper evaluates the structural shift.