Enterprising Investor Mark Higgins, CFA, and Leyla Kunimoto: Cracks in Private Markets and the Risks of Semi-Liquid Funds
Apr 10, 2026
Leyla Kunimoto, founder of Accredited Investor Insights who analyzes private equity, credit, and real estate. Mark Higgins, CFA, author and financial historian focused on market cycles. They dig into growing stress in private credit and evergreen funds. They explain NAV-based valuation quirks, manager incentives that distort pricing, rising exit queues and likely paths for liquidity as market strain builds.
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Mass Inflows Then Runs Signal Fragility
- Massive inflows into private credit and semi-liquid funds followed by sudden redemptions signal systemic fragility rather than just performance issues.
- Mark Higgins notes this pattern repeats across history: huge capital inflows, aligned incentives, then abrupt breaks, seen from land booms to GFC-era real estate.
NAV Practical Expedient Enables Markups
- ASC 820's NAV practical expedient lets secondary buyers purchase LP stakes at discounts then mark them up to reported NAV on their books.
- Leyla Kunimoto explains this creates ambiguity: trade price can be 80 cents yet funds can revalue to 100 cents for reporting and marketing.
Private Equity Secondaries Are More Vulnerable
- Private equity secondaries are riskier than private credit in a run because they lack cash flow and have long holding periods.
- Mark Higgins and Leyla Kunimoto highlight 10–12 year stakes and low turnover make liquidity management far tougher than middle-market loans.
