Affluent investors are increasingly turning to closed-end funds as diversification tools, Dow Jones reports. Because they close to new investments after an initial public offering, they place a greater amount of their assets in illiquid investments.
Nuveen Investments recently surveyed wealthy investors and found that their holdings closed-end funds have risen by 30% over the past year. In addition, they are also pouring more money into private equity. According to Private Equity Intelligence, a consulting firm, private equity has raised about $400 billion over the past two years.