Private Equity for Individuals: Strategic Access

Private equity firms have spent the last few years building products for individuals: funds with lower minimums, monthly pricing, and quarterly redemptions. In 2026 those products met their first real test when several large evergreen funds limited withdrawals. This guide covers the ways an individual can invest in private equity, what each costs, how the cash flows and redemption terms work, and who should avoid it.

For how to evaluate the manager behind any of these products, see our private equity due diligence guide. For how private equity fits with other alternatives, see our alternative investments guide.

Who can invest

Eligibility depends on the product:

• Accredited investors can buy most private offerings. An individual qualifies with net worth over $1 million excluding a primary residence, or income over $200,000 ($300,000 with a spouse or partner) in each of the last two years with the same expected this year, or by holding certain securities licenses such as the Series 7, 65, or 82 (SEC).
• Qualified clients are needed when a registered adviser charges a performance fee. Since June 29, 2026 that means at least $1.4 million managed by the adviser or $2.7 million of net worth (Holland & Knight).
• Qualified purchasers, generally individuals with at least $5 million of investments, can buy funds that rely on the Investment Company Act's 3(c)(7) exemption, which includes many large buyout funds.
• Registered funds, such as interval funds and tender-offer funds, can be sold more widely. In August 2025 SEC staff dropped its long-standing position that limited registered closed-end funds investing more than 15% in private funds to accredited investors (SEC ADI 2025-16).

The main routes

How evergreen funds work, and where they strain

An evergreen fund invests new money immediately, usually through secondary purchases of existing fund stakes, co-investments alongside buyout funds, and some commitments to new funds. It prices units monthly using the manager's valuations and offers to buy back a limited share each quarter. Terms from recent filings:

• Blackstone's BXPE US fund expects to redeem up to 3% of units per quarter, charges a 5% early redemption deduction on units held less than two years, and pays Blackstone a performance allocation of 12.5% of total return above a 5% annual hurdle, with a high-water mark and full catch-up (BXPE 10-Q).
• In June 2026, Partners Group limited redemptions from its $8.6 billion Global Value SICAV to 5% of NAV after requests reached an estimated 9.8% for the second quarter (WealthManagement.com). That followed three quarters of similar limits at large private credit funds.

Those limits protect remaining investors from forced sales, and they mean an evergreen fund should be treated as a multi-year holding even though it prices monthly.

Two features make evergreen returns look smoother than the underlying companies are. NAV is based on the manager's quarterly marks, which move slowly. And many funds buy secondary stakes at a discount to the seller's reported NAV, then mark them up to that NAV, recording an immediate gain. Researchers at EDHEC Infrastructure & Private Assets argued that reported evergreen returns are often inflated by these quick markups and that their low volatility and high Sharpe ratios largely reflect smoothed NAVs. They contrasted them with listed private equity trusts, which trade at deep discounts and move far more (EDHEC).

Fees vary widely. Cliffwater studied 19 evergreen private equity funds with $35 billion of assets and found average all-in expenses of 2.91% of NAV, ranging from 0.96% to 5.49%, including an average management fee of 1.44% and 0.71% in fees of underlying funds (Cliffwater). Read the prospectus fee table, then ask what carried interest the underlying funds charge that is not in it.

How a drawdown fund's cash flows work

A feeder fund places individuals into a traditional ten-year partnership. You commit an amount, and the fund calls it as it buys companies. An illustration with hypothetical numbers for a $250,000 commitment:

The investor paid in $225,000 (90% of the commitment) and received $385,000, a 1.71x multiple and an 11.66% IRR. The most money out at once was $200,000, or 80% of the commitment, in year four, and the investor was not ahead until year eight. Holdings have been stretching: Bain reported buyout holding periods of around seven years in 2025, against five to six years from 2010 to 2021, so later distributions than this are plausible.

Capital calls usually come with about 10 business days' notice, and missing one is a default under the fund agreement, with penalties that can include losing part of what you have already paid in. Keep the uncalled commitment in Treasury bills or a money market fund. In this example, holding the uncalled balance in bills yielding 3.8% would have earned about $17,100 over the five-year investment period.

Private equity in 401(k) plans

An executive order in August 2025 directed the Department of Labor to make it easier for 401(k) plans to offer alternatives. The Department proposed a rule on March 30, 2026 under which fiduciaries choosing an investment option would consider factors including performance, fees, liquidity, valuation, performance benchmarks, and complexity (DOL). The comment period closed on June 1, 2026, and as of late September the rule had not been finalized.

Litigation risk is still open. The Supreme Court agreed in January 2026 to hear Anderson v. Intel, in which a former employee claims Intel's plan fiduciaries acted imprudently by putting hedge fund and private equity allocations in its target-date funds. Argument is set for October 6, 2026 (SCOTUSblog). Most participants who get private equity exposure through a plan will get it as a small sleeve inside a target-date fund, not as a standalone choice.

Who should skip it

Private equity makes little sense for anyone who may need the money within five to ten years, who does not have an emergency fund and adequate retirement savings in ordinary index funds, or whose total investable assets are small enough that a single illiquid holding would be a large share. A low-cost index fund of small-cap stocks is a reasonable public-market comparison for much of what buyout funds own, and it is fully liquid. Cambridge Associates reported that its US private equity index returned 8.7% in 2025 and that public markets came out ahead over most periods shorter than ten years.

For those who do invest, common guardrails are to keep private holdings a modest share of the portfolio, to commit over several years so vintage years are spread out, and to count evergreen funds as illiquid when planning withdrawals. Our portfolio rebalancing guide covers how to keep an illiquid sleeve in proportion, and our guide to wealth management fees covers how adviser fees stack on top of fund fees. For the pre-IPO route to private companies, see our pre-IPO investing guide.

Before you invest

1. Confirm which eligibility test the product requires and that you meet it.
2. Read the fee table and ask for the all-in cost, including underlying fund fees and carried interest.
3. Read the repurchase terms: the quarterly cap, early redemption charges, and the board's power to suspend.
4. Ask how NAV is set, how often it is independently reviewed, and how secondary purchases are marked.
5. For drawdown funds, plan where the uncalled commitment will sit and how you would meet calls in a downturn.
6. Check the tax reporting: registered funds usually send a Form 1099, while partnerships send a Schedule K-1 that may arrive after the filing deadline.

This guide is for general information and is not investment, legal, or tax advice. Private equity investments are illiquid, can lose value, and may limit or suspend redemptions. Fund terms are as disclosed in the filings cited and can change. The cash flow illustration uses hypothetical numbers. Consult a qualified adviser before investing.