Clients have long watched from behind the velvet rope as Wall Street’s VIPs got access to private funds. Now they’re finding themselves on the guest lists. 

Semiliquid funds offer access to illiquid assets with the potential for high returns without requiring investors to lock up their cash for years (typically with quarterly withdrawals that are capped at 5% of the fund’s value). Investors seem to think it’s worth it: These funds are nearing $600 billion in net assets as of the end of March, more than double the amount at the end of 2022, according to a new report from Morningstar. But what’s got investors interested in semiliquid funds has changed dramatically in just around 12 months. 

“Last year when we were…