Brian Moriarty and Jack Shannon: Putting Private Markets Funds Through Their Paces

**SPEAKER_1** (0:00)
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**SPEAKER_2** (0:27)
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**Ben Johnson** (0:33)
Welcome to The Long View. I'm Ben Johnson, head of Client Solutions with Morningstar. Today's guests are Morningstar's Brian Moriarty and Jack Shannon. Brian is a principal fixed income strategies for Morningstar. Before assuming his current role in 2015, Brian was a Client Solutions Consultant for Morningstar Office, a practice and portfolio management system for independent financial advisors. Before joining Morningstar in 2013, he was a research assistant for DePaul University's Religious Studies Department. Brian holds a bachelor's degree in political science from Michigan State University, and a bachelor's degree in Islamic world studies from DePaul University.
Jack Shannon is a principal equity strategies for Morningstar. He focuses on actively managed equity strategies, and is the lead analyst for MFS and Artisan Partners among other firms. Before joining Morningstar in 2020, Jack worked in commercial banking and was a consultant providing subject matter expertise on complex financial litigation.
Jack holds a bachelor's degree in economics and history from James Madison University. He also holds a master's of business administration in investments and corporate finance from the University of Notre Dame's Mendoza College of Business.
Brian, Jack, welcome to The Long View.

**Jack Shannon** (1:58)
Thank you. Happy to be here.

**Ben Johnson** (2:00)
So I want to start off our conversation at the very highest level. I think there are any number of our listeners that are unfamiliar or uninitiated with just the concept of private markets. So let's begin at the very most basic level. Brian, I'll ask you to help us understand, what are we talking about when we're talking about private markets and investment opportunities in these markets? And why are we talking about them? Why has this become such a popular topic for conversation in 2026?

**Brian Moriarty** (2:33)
Sure.
Private markets are really anything that takes place outside of the public markets, which is sort of a strange way to start, but it's important because it means for private equity that these are equities that are not traded, they're not listed on an exchange anywhere, their information is not publicly available the same way a listed company is when they file their quarterly and annual filings. And in private credit, it's credit lending that takes place outside of the normal banking system, the normal lending systems, which means information is a little bit harder to access. So in both cases, data is much more difficult to come by when it comes to these companies, these investments that we're talking about.
And this market has really grown astronomically in the last couple of years, especially since COVID roughly. And during that growth or as a part of that growth, these asset managers, these private capital asset managers, started offering product to advisors, wealth, retail channel, through vehicles like interval funds, tender offer funds and unlisted BDCs. Collectively, we would call them semi-liquid funds. And so as these asset managers started selling into these markets, this is where Morningstar steps in and really tries to explain what these are and educate the investors so that they can make informed decisions when they're starting to allocate money to these products.

**Ben Johnson** (3:59)
Brian, one of the key words you hit on there is access. I think for so long, many of these investment opportunities had previously been inaccessible for all, but some of the largest investors, be it institutions or ultra-high net worth individuals. Jack, I'm wondering if you can help us unpack some of these newer, in some cases newer, and some cases maybe just newly popular access vehicles. What Brian described as semi-liquid funds, oftentimes you'll hear terms like evergreen funds or perpetual capital vehicles getting tossed around.
Why are these increasingly the preferred means of tapping into private markets for advisors and even some individual investors?

**Jack Shannon** (4:49)
Yeah, there's a great name debate going on in the industry over what they should be called. We settled on semi-liquid. It denotes these are less liquid than your mutual funds and the F's that everyday people are used to.
Typically these kinds of products, there's a bunch of different kind of structures. Brian outlined some of them, interval funds, tender offer funds, unlisted BDCs, unlisted REITs, 3C7 funds, these funds that are exempt from registration. All of them provide some sort of periodic liquidity. Most of them are a quarterly basis. Some of them might do monthly. Some of them might do semiannually, depending on the asset class. But in a lot of ways, I think private asset managers, when they're going down to more retail audiences, are looking to provide a somewhat familiar experience. And so like when you think about interval funds, they kind of look like mutual funds. I think the big thing we saw in private credit, and maybe that we're very conscious of, at least in terms of how the industry is selling these things, is, you know, again, if they're labeled semi-liquid, how are they being really sold to retail investors or to advisors? Like, I think the industry is starting to realize that perhaps they maybe oversold the liquidity piece, and when you see, you know, 12%, 15%, 20% of investors try to exit all in one quarter, that probably is a sign that the liquidity piece wasn't necessarily articulated as well as it should have.