Company Announcements

CHICAGO--(BUSINESS WIRE)--May 6, 2025-- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, today introduced the Morningstar Medalist Rating™ for Semiliquid Funds, expanding its established Medalist Rating framework to the growing segment of semiliquid investment vehicles. As public and private markets converge and product offerings become more complex, the new rating brings greater transparency and due diligence to private markets.

"Semiliquid funds are becoming more accessible and gaining traction in the investment landscape, but their unique structures present challenges that warrant a reliable framework for evaluation," said Laura Lutton, Morningstar’s global head of manager research. "Morningstar has a long track record of helping bring clarity to complex areas of the market. With this new rating, we are applying that same rigorous approach to help investors assess these strategies with confidence and make well-informed decisions."

This new rating expands on the Morningstar Medalist Rating – the firm’s forward-looking ratings methodology used for mutual funds and exchange-traded funds (ETFs) – to a range of vehicles with limited liquidity and/or exposure to private market assets. These include interval funds, tender-offer funds, nontraded real estate investment trusts (REITs), and nontraded business development companies (BDCs) in the United States, as well as European Long-Term Investment Funds (ELTIFs), United Kingdom Long-Term Asset Funds (LTAFs), and certain Australia-domiciled managed investment schemes. Investor interest in semiliquid structures has accelerated in recent years, with U.S. interval funds alone growing at an annualized rate of nearly 40% over the past decade through May 2024, according to Morningstar research.

The methodology is tailored to account for the distinct structures, liquidity constraints, and potential private asset exposures of semiliquid vehicles. Ratings will use Morningstar’s five-tier scale – Gold, Silver, Bronze, Neutral, and Negative – to express conviction in a strategy’s potential to outperform over the long term, while also guiding investors and selectors with insights on a strategy’s role in the portfolio, risks, and potential outcomes across varying market conditions.

The Morningstar Medalist Rating for Semiliquid Funds is designed to:

• Identify strategies expected to outperform relevant public market benchmarks, private market indexes, and peer groups over the long term, and flag strategies likely to underperform.
• Assess a strategy’s suitability to an investor’s goals, liquidity needs, and risk profile.
• Provide key context on factors like fees, manager tenure, asset size, and investment approach.
• Monitor ongoing changes in strategies that could materially impact performance or alignment to investor expectations.

Morningstar will begin assigning ratings under this new methodology in the third quarter of 2025, starting with U.S.-based semiliquid strategies. These strategies will be assessed using a fully qualitative approach, with coverage determined by Morningstar’s analyst teams based on factors such as investment merit, investor demand, and client interest. The Medalist Ratings will be displayed on Morningstar.com as well within products in the Direct Platform, including Morningstar Direct, Direct Advisory Suite, and in data feeds associated with select interval funds.

The full methodology is available here. For more information, please visit our Frequently Asked Questions here. A detailed article on the methodology and new rating process for semiliquid funds can be viewed on Morningstar.comhere.

Morningstar’s Capabilities for a Converging Market

The launch of the Medalist Rating for Semiliquid Funds is the latest step in Morningstar’s effort to construct a common investment language across public and private markets, empowering investors to evaluate investments and portfolios with actionable data, standardized analytics, and unified workflow tools.

Earlier this year, Morningstar made updates to its Categories system to more granularly differentiate between public and private investments, debuted a new investable Morningstar PitchBook Unicorn 30 Index that tracks the 30 most liquid late-stage venture capital-backed private companies valued at $1 billion or more, and added private capital funds to Morningstar Direct.

In March, Morningstar acquired Lumonic. Lumonic’s private credit portfolio monitoring and management product is designed to empower clients to easily monitor their assets alongside PitchBook’s best-in-class private markets reference data and analytical suite. PitchBook’s expanded data coverage now encompasses leveraged loan and high-yield bond news and analysis as well as BDC portfolio holdings and collateralized loan obligations (CLOs). Morningstar Credit has also grown its ratings on private debt, covering everything from esoteric asset-backed securities and asset-based lending to both investment-grade and non-investment-grade private-placement corporate transactions.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, institutional investors in the debt and private capital markets, and alliances and redistributors. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $341 billion in AUMA as of March 31, 2025. The Company operates through wholly-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on X @MorningstarInc.

Morningstar’s Manager Research Group

Morningstar’s Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Morningstar Manager Research provides independent, fundamental analysis on managed investment strategies. Morningstar views are expressed in the form of Morningstar Medalist Ratings, which are derived through research of three key pillars—People, Process, and Parent. The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. A global research team issues detailed research reports on strategies that span vehicle, asset class, and geography.

Medalist Ratings are not statements of fact, nor are they credit or risk ratings, and should not be used as the sole basis for investment decisions. A Medalist Rating is not intended to be nor is a guarantee of future performance. This press release is for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities.

©2025 Morningstar, Inc. All Rights Reserved.

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Morningstar Media Contact:
Michael Claussen, +1 312 696-6037 or newsroom@morningstar.com

Source: Morningstar, Inc.