Reaching a certain financial status opens up a world of investment opportunities—but it also introduces new complexities. For high-earning professionals considering private investments for the first time, one of the most common questions is: “Will I be locking up too much of my money? What if I need access to cash?” [1]
These are fair questions. After all, private investments—like real estate, private equity, and venture capital—aren’t as easily converted to cash as the stocks or bonds you might be accustomed to. However, the idea that private investing always comes at the expense of financial flexibility is a myth.
In reality, you can grow your wealth through private investments while maintaining access to capital if you align your strategy with your liquidity needs. While private markets do involve longer holding periods, they also offer unique opportunities and potentially higher returns, partly due to the liquidity premium—the extra return investors expect for committing capital for longer periods or accepting limited access. [2]
This article explores how different types of private investments provide varying levels of liquidity, how to assess your near-term cash needs, and how partnering with an experienced advisor can help you build a balanced approach—one that drives long-term growth without sacrificing the lifestyle and freedom you’ve worked hard to create.
Why Liquidity Matters, Even When You’re Doing Well
As a seasoned investor, you know liquidity is about more than just covering emergencies—it’s about choice and control. Whether you’re managing an unexpected tax bill, making a large family purchase, or seizing a once-in-a-lifetime investment opportunity, having cash on hand provides flexibility and peace of mind.
Many high-income earners assume that illiquidity is simply the price of admission for private investing. But today’s market offers more flexibility than ever. A growing range of private investment vehicles—like evergreen funds and income-generating private debt—now help investors stay diversified while still meeting near-term cash needs. [3]
That flexibility is becoming increasingly important. Record-breaking activity in private secondary markets shows that even institutional investors are finding creative ways to rebalance portfolios and generate liquidity without fully exiting private markets. Individual investors can adopt a similar mindset. [4]
A good starting point is identifying what liquidity you might need over the next three to five years. With that horizon in mind, you and your advisor can create a strategy that balances access to cash with long-term growth opportunities.
Understanding the Liquidity Spectrum in Private Markets
Not all private investments are equally illiquid. One of the most important—but often overlooked—factors in building a private markets portfolio is understanding where a given fund falls on the liquidity spectrum. From private debt to venture capital, each asset class offers different methods for accessing capital, and the trade-offs between liquidity and return potential can be substantial. [3]
At the more liquid end of the spectrum are private debt funds. These investments can offer regular income and more predictable liquidity compared to other private market options. Private debt funds typically focus on secured, short-term loans, generating monthly or quarterly interest payments. Due to frequent loan turnover, fund managers can refinance or reinvest proceeds, making it easier to accommodate redemption requests—especially within an evergreen structure. [3]
In private markets, evergreen refers to investment vehicles without a set end date—also known as perpetual, perpetual-life, or semi-liquid funds. These structures include interval funds, tender offer funds, non-traded REITs, business development companies (BDCs), and private funds. Unlike traditional drawdown funds, evergreen funds are typically fully funded at the time of investment and offer limited, periodic liquidity under specified conditions. This setup allows investors to remain invested long-term while retaining some capital access. [5]
Evergreen funds occupy the middle of the liquidity spectrum. They allow for entry and exit on a quarterly basis, depending on available capital and redemption gates. While they often offer lower returns than traditional drawdown funds, they can help investors avoid the “J-curve” effect and gain earlier exposure to returns. The growth of evergreen funds, now a nearly $400 billion market, has expanded flexible private equity strategies for high-income investors. [6]
At the far end of the spectrum are highly illiquid investments, such as venture capital and one-off private real estate deals. These strategies generally involve long lock-up periods but hold the potential for significant returns. Because capital might be tied up for years, these investments are best suited for those with a long-term outlook and a higher tolerance for risk. [7][8]
Greater liquidity often means sacrificing some return potential. Illiquid strategies, while sometimes higher yielding, come with trade-offs in terms of access. Understanding these dynamics helps investors and their advisors build portfolios that reflect both growth ambitions and real-world cash flow needs.
Strategic Approaches for Private Market Investing
Navigating private markets successfully requires a thoughtful, well-structured approach. Blending strategies with various liquidity profiles is key—some designed to address short-term needs, others focused on long-term growth. The goal is to ensure access to capital when needed without compromising performance potential. [9]
One effective strategy is laddering—staggering investment maturities so different positions come due at various times. Think of it like planting a garden with crops that mature at different points; you don’t harvest everything at once, and you’re not left waiting endlessly for results. [10]
Laddering creates a steady rhythm of liquidity while keeping long-term investments working for you. This method also helps manage interest rates and reinvestment risks. Instead of going “all in” or “all out” of private investments, a diversified approach across different timelines helps smooth volatility and improve portfolio efficiency.
Why Choosing the Right Advisor Matters
Contrary to common belief, liquidity and growth aren’t mutually exclusive. With the right structure, private market investments can provide both. However, evaluating fund terms, liquidity schedules, and redemption policies is complex—that’s where a knowledgeable advisor adds the most value. A seasoned partner can map out your cash flow needs, identify suitable private investment options, and structure your portfolio to support your evolving financial goals.
When done right, a private investment liquidity strategy becomes a lever, not a limitation. You don’t have to choose between access and opportunity when you work with someone who understands the nuances of private markets and your unique financial landscape.
Building a liquidity strategy that balances growth and financial flexibility doesn’t have to be complicated, but it does require the right plan. At Envision Wealth Planners, we specialize in helping high-income families, successful business owners, and commercial real estate executives create customized private market strategies that align with their goals.
Schedule a consultation today to explore how you can strengthen your portfolio with private investments—without sacrificing access to the capital you need to live life on your terms.
Sources:
- https://info.caisgroup.com/hubfs/2025%20Report%20_%20CAIS-Mercer%20Alternative%20Investment%20Survey.pdf
- https://www.investopedia.com/terms/l/liquiditypremium.asp
- https://assets.ctfassets.net/matahbe7799j/6E85LwMHuBfgnpfG07vJZu/8177c2c40ea3adc4cabe8039556d5d6a/CAIS_Ares_Aligning_Investment_Strategy_With_Liquidity.pdf
- https://www.caisgroup.com/articles/whats-behind-the-recent-growth-in-private-markets-secondaries
- https://www.caisgroup.com/articles/the-potential-tradeoffs-of-evergreen-fund-structures
- https://www.caisgroup.com/articles/pacing-commitments-across-private-equity-vintages
- https://www.caisgroup.com/articles/an-introduction-to-venture-capital
- https://www.caisgroup.com/articles/an-introduction-to-private-real-estate
- https://am.jpmorgan.com/us/en/asset-management/institutional/insights/portfolio-insights/portfolio-strategy/allocation-spotlight/unlocking-the-full-potential-of-private-strategies/
- https://www.investopedia.com/terms/l/laddering.asp
Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm based in the greater Orlando area. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about them at envisionplanners.com.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security, investment, or other financial product. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.