Evergreen funds: A new era in private markets for individuals
PRIVATE markets, once the domain of institutional investors and 10-year, closed-end commitments, have opened to a broader audience of private wealth. Key to this transformation has been the rise of semi-liquid evergreen fund structures – perpetual private market funds with periodic liquidity windows.
These innovative vehicles include: Europe's updated ELTIF 2.0 (European Long-Term Investment Fund) and the UK's Long-Term Asset Fund (LTAF); US interval funds; non-traded BDCs (Business Development Companies); and real estate investment trusts (Reits).
They are fundamentally changing how private wealth investors and, retail investors in particular, access alternatives. We are entering a new era in private markets – one marked by greater access, innovation and collaboration.
Democratising access
The momentum behind semi-liquid evergreen funds is undeniable. Investors who were once dissuaded by illiquidity, large ticket sizes, and capital call complexities are finding the new structures far more palatable.
Over the past five years, the number of evergreen funds has nearly doubled to 520, representing at least US$350 billion of net asset value, Preqin data showed.
This trend aligns with a broader industry movement towards democratisation. Currently, private investors represent nearly half of global wealth – estimated at over US$140 trillion – yet account for only 16 per cent of private markets' total assets under management, which currently stand at US$13.1 trillion.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The runway for growth remains extensive, and semi-liquid evergreen funds are a crucial bridge to narrow this gap.
Many in the wealth management channel have embraced the semi-liquid evergreen fund structure as their preferred entry point into private markets. The funds' open-ended nature means that capital can be deployed on day one and begin compounding sooner.
It is hard to find a private markets general partner (GP) today that is not actively exploring the private wealth opportunity set and the viability of launching a semi-liquid evergreen fund.
For private wealth intermediaries and their clients, there is a comprehensive and growing menu of private assets in semi-liquid evergreen format.
The market is populated with a diversity of opportunities across traditional strategies, multi-manager, multi-strategy and multi-asset semi-liquid funds.
We have seen launches from GPs as diverse as Apollo, Ares, Hg, Macquarie and Vista. Private banks and wealth managers are starting to manufacture their own internal semi-liquid evergreen funds of funds as an alternative to traditional closed-ended vintage programmes.
Private markets GPs are becoming ever more creative in structure, liquidity management and investment strategy to make these vehicles work for a broader investor base.
Many semi-liquid evergreen funds maintain a liquidity 'sleeve' – a portion in cash or public securities – to facilitate periodic redemptions.
Often secondaries and co-investments are used to quickly deploy capital and reduce cash drag, ensuring that new inflows are put to work efficiently.
Navigating operational and regulatory hurdles
No revolution comes without challenges. Semi-liquid evergreen funds by nature combine features of open-ended and closed-ended funds, which introduces operational complexity.
GPs and their service providers must master new processes, including valuation of illiquid assets on a continual basis, managing subscriptions and redemptions and handling liquidity mismatches.
Combining liquid and illiquid components necessitates expertise ranging from establishing valuation procedures and net asset value calculation frequency to implementing mechanisms such as gates and series. Onboarding investors into these funds can also be cumbersome today.
Regulatory complexities also persist, notably through country-by-country variations.
Europe has taken a big leap with ELTIF 2.0, which provides a unified passport to market evergreen funds to retail investors across the European Union, along with tax incentives and a clearer rulebook.
The UK introduced the LTAF, and the US has longstanding semi-liquid structures – interval funds, tender offer funds, and non-traded BDCs and Reits.
Other regions are catching up: In Asia, markets such as Hong Kong, Singapore and Australia are at the forefront of adopting evergreen fund offerings, while others are still developing the necessary distribution and regulatory ecosystem.
These inconsistencies complicate efforts to distribute evergreen funds across multiple jurisdictions seamlessly.
Additionally, investor education remains a pressing issue. The term 'semi-liquid' itself may inadvertently suggest more immediate liquidity than these structures realistically offer.
Clear and consistent messaging is crucial to managing investor expectations, preventing mis-selling, and ensuring that participants fully understand the liquidity profiles and risks inherent in these funds.
This is where fintech solutions platforms come into the equation, serving as outsourced product manufacturers and operations hubs, seamlessly integrating funds, private banks and fund administrators.
Through standardised regulatory compliant workflows that adapt to cross-border regulatory regimes, fintechs are critical facilitators of scale and operational efficiency.
A collaborative path
Despite these challenges, the trajectory of semi-liquid evergreen funds is decidedly upwards.
The reason for optimism is simple: These structures address a real need.
They enable wealth managers and family offices to craft portfolios that include the return potential of private equity, private credit, real estate and infrastructure without the severe liquidity lock-ups of the past.
They enable successful GPs to expand their investor base and secure stable, long-duration capital. And they create opportunities for individual investors (and their advisers) to benefit from institutional-quality assets and managers.
In short, evergreen funds are central to the democratisation of private markets – a theme that will only grow stronger.
The writer is founder and CEO, S64 Capital
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
6 days ago
- Straits Times
i Light Singapore 2025 launched on May 29
National Development Minister Chee Hong Tat (second from left) invited the public to view the Draft Master Plan 2025 exhibition when it launches on June 25. ST PHOTO: AZMI ATHNI New city blueprint to be launched at URA Draft Master Plan exhibition on June 25 SINGAPORE – Singapore will have a new blueprint to guide the city's development over the coming years when the Urban Redevelopment Authority (URA) launches its Draft Master Plan on June 25. Announcing the launch date at an event on May 29, National Development Minister Chee Hong Tat said visitors to the exhibition of the masterplan will see 'how we are planning for a liveable, inclusive and endearing home. A home that all of us can be proud of'. Mr Chee was speaking at the opening of the art festival i Light Singapore, which is in its 11th edition and features 17 light installations in Marina Bay, Raffles Place, the Singapore River and South Beach. The URA Master Plan – one of two major development blueprints by Singapore's planning authority – is a statutory document that guides Singapore's development for the next 10 to 15 years and is reviewed once every five years. It translates broader strategies from the other development blueprint – the Long-Term Plan – into detailed plans that guide how land and properties are used. The Long-Term Plan, which guides plans for the next 50 years and beyond, is reviewed once every decade, with the last edition unveiled at an exhibition in 2022. Public consultations for the upcoming masterplan began in October 2023, and conversations have been shaped around four themes: Shaping A Happy Healthy City, Enabling Sustainable Growth, Strengthening Urban Resilience and Stewarding Our Nature And Heritage . Current developments are guided by the URA Master Plan 2019, which came into force in November that year after it was exhibited for a few months. The Guardians by Matthew Aberline and The Beautiful and Useful Studio (Australia), located at Raffles Place Park. ST PHOTO: ARIFFIN JAMAR Highlights from the 2019 masterplan include the Rail Corridor, Punggol Digital District and the Greater Southern Waterfront. Some of these projects are still in development. Speaking at Marina Bay, Mr Chee said the transformation of the bay area is a testament to Singapore's long-term planning and meticulous implementation. He noted that plans for the bay were developed in the 1970s, when pioneer leaders and planners saw the need to expand Singapore's city centre to support the country's growth as a global business and financial hub. Reclamation of 360ha of land to form the bay took place between the 1970s and 1990s, with landmarks such as Marina Bay Sands and Gardens by the Bay's Bay South Garden built entirely on reclaimed land later. The area's transformation 'is the story of the foresight of those who came before us, who dared to dream and who have laid the foundations for a better Singapore', Mr Chee said. He said the bay is part of Singapore's skyline, which is recognised globally, and that the area is 'a people's bay', with community spaces for all to enjoy. Initiatives such as i Light Singapore gather people from all walks of life and help to bring these community spaces to life, said Mr Chee, who added that the festival celebrates aspirations for a sustainable, shared future. He cited the Bridge Of 1,000 Dreams, an installation that features a thousand illuminated bamboo sticks on Cavenagh Bridge, each of which was decorated by a child and reflects 'the dreams and visions of Singaporeans'. Mr Chee interacting with guests at the launch of i Light Singapore 2025, with the art installation Bridge Of 1,000 Dreams in the background. ST PHOTO: AZMI ATHNI The work is by Studio Toer, a multidisciplinary design studio from The Netherlands, and features Singapore motifs created by local design studio Binary Style. Mr Castor Bours, Studio Toer's co-founder, said having children work on the bamboo sticks 'may be the most important part of the installation'. He added: 'At the end, the sticks are put on a beautiful bridge, but the whole process of helping people think about what they want for their city, what they want for their future in a creative way – that's what makes this installation different from others.' He said having public art installations in the city helps break the monotony of daily life. 'People have their rituals, they walk to work and return from their workplace, and somehow, with an installation, this breaks the ritual a bit,' Mr Bours said. 'They take a few seconds or maybe minutes to get off that rhythm, and be inspired again by their own city. It's a way to be distracted from reality.' Ng Keng Gene is a correspondent at The Straits Times, reporting on issues relating to land use, urban planning and heritage. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
6 days ago
- Business Times
URA to unveil Draft Master Plan 2025 in June: Chee Hong Tat
[SINGAPORE] The Urban Redevelopment Authority (URA) will be unveiling the Draft Master Plan 2025 on Jun 25, Minister for National Development Chee Hong Tat on Thursday (May 29). The long-awaited draft masterplan, which will map out Singapore's detailed land plans for the next 10 to 15 years, is being introduced at an exhibition after city planners gathered public feedback following the launch of the engagement exercise in October 2023. More homes are being planned in various locations in the Central Region such as Bukit Timah Turf City, Mount Pleasant, the former Keppel Golf Course and Marina South. The government is also focusing on decentralisation, with Jurong Lake District set to become the largest mixed-use district outside the Central Business District. Plans are underway to further develop Changi Aviation Park and Changi City as well as regional hubs such as Tampines and Punggol Digital District. The public was also consulted on a recreation masterplan which will spotlight Singapore's parks, public spaces and attractions as well as 'Long Island', a 800 hectare land reclamation project along the eastern coast of Singapore. Chee was speaking at the opening ceremony for i Light Singapore, the light art festival held in Marina Bay since 2010. The festival was launched by URA to mark the opening of Marina Bay. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Chee said: 'Our vision for Marina Bay started as early as the 1970s, when our pioneer generation of leaders and planners foresaw the need to expand the city centre to support and sustain Singapore's long-term growth as a global business and financial hub.' 'Plans were set in motion, to reclaim some 360 hectares of prime waterfront land around a new waterbody that is seamlessly connected to the existing city centre.' Today, Marina Bay is a dynamic and modern hub anchored on sustainable infrastructure with attractions and mixed-use developments, Chee said. 'The transformation of Marina Bay is a story of long-term planning and also meticulous implementation.' Every 10 years, the government reviews the Long-Term Plan that guides the development of Singapore, mapping out strategic land uses and infrastructure needs over the next 50 years. Chee said: 'This is how far we plan ahead so that we are ready for the future.' The development of Singapore is not just about constructing buildings and infrastructure but also about connecting people and places and creating spaces where Singaporeans live, work and play, the minister said. He said: 'As I take on this new portfolio at MND... it is a very challenging task but it is also a very meaningful job. I hope to continue to engage and collaborate with all of you – our stakeholders and partners – to transform even more of our public spaces into vibrant and impactful experiences that brighten our lives, strengthen our community identity and foster a sense of shared ownership of this beautiful city we call home.'
Business Times
29-04-2025
- Business Times
Evergreen funds: A new era in private markets for individuals
PRIVATE markets, once the domain of institutional investors and 10-year, closed-end commitments, have opened to a broader audience of private wealth. Key to this transformation has been the rise of semi-liquid evergreen fund structures – perpetual private market funds with periodic liquidity windows. These innovative vehicles include: Europe's updated ELTIF 2.0 (European Long-Term Investment Fund) and the UK's Long-Term Asset Fund (LTAF); US interval funds; non-traded BDCs (Business Development Companies); and real estate investment trusts (Reits). They are fundamentally changing how private wealth investors and, retail investors in particular, access alternatives. We are entering a new era in private markets – one marked by greater access, innovation and collaboration. Democratising access The momentum behind semi-liquid evergreen funds is undeniable. Investors who were once dissuaded by illiquidity, large ticket sizes, and capital call complexities are finding the new structures far more palatable. Over the past five years, the number of evergreen funds has nearly doubled to 520, representing at least US$350 billion of net asset value, Preqin data showed. This trend aligns with a broader industry movement towards democratisation. Currently, private investors represent nearly half of global wealth – estimated at over US$140 trillion – yet account for only 16 per cent of private markets' total assets under management, which currently stand at US$13.1 trillion. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The runway for growth remains extensive, and semi-liquid evergreen funds are a crucial bridge to narrow this gap. Many in the wealth management channel have embraced the semi-liquid evergreen fund structure as their preferred entry point into private markets. The funds' open-ended nature means that capital can be deployed on day one and begin compounding sooner. It is hard to find a private markets general partner (GP) today that is not actively exploring the private wealth opportunity set and the viability of launching a semi-liquid evergreen fund. For private wealth intermediaries and their clients, there is a comprehensive and growing menu of private assets in semi-liquid evergreen format. The market is populated with a diversity of opportunities across traditional strategies, multi-manager, multi-strategy and multi-asset semi-liquid funds. We have seen launches from GPs as diverse as Apollo, Ares, Hg, Macquarie and Vista. Private banks and wealth managers are starting to manufacture their own internal semi-liquid evergreen funds of funds as an alternative to traditional closed-ended vintage programmes. Private markets GPs are becoming ever more creative in structure, liquidity management and investment strategy to make these vehicles work for a broader investor base. Many semi-liquid evergreen funds maintain a liquidity 'sleeve' – a portion in cash or public securities – to facilitate periodic redemptions. Often secondaries and co-investments are used to quickly deploy capital and reduce cash drag, ensuring that new inflows are put to work efficiently. Navigating operational and regulatory hurdles No revolution comes without challenges. Semi-liquid evergreen funds by nature combine features of open-ended and closed-ended funds, which introduces operational complexity. GPs and their service providers must master new processes, including valuation of illiquid assets on a continual basis, managing subscriptions and redemptions and handling liquidity mismatches. Combining liquid and illiquid components necessitates expertise ranging from establishing valuation procedures and net asset value calculation frequency to implementing mechanisms such as gates and series. Onboarding investors into these funds can also be cumbersome today. Regulatory complexities also persist, notably through country-by-country variations. Europe has taken a big leap with ELTIF 2.0, which provides a unified passport to market evergreen funds to retail investors across the European Union, along with tax incentives and a clearer rulebook. The UK introduced the LTAF, and the US has longstanding semi-liquid structures – interval funds, tender offer funds, and non-traded BDCs and Reits. Other regions are catching up: In Asia, markets such as Hong Kong, Singapore and Australia are at the forefront of adopting evergreen fund offerings, while others are still developing the necessary distribution and regulatory ecosystem. These inconsistencies complicate efforts to distribute evergreen funds across multiple jurisdictions seamlessly. Additionally, investor education remains a pressing issue. The term 'semi-liquid' itself may inadvertently suggest more immediate liquidity than these structures realistically offer. Clear and consistent messaging is crucial to managing investor expectations, preventing mis-selling, and ensuring that participants fully understand the liquidity profiles and risks inherent in these funds. This is where fintech solutions platforms come into the equation, serving as outsourced product manufacturers and operations hubs, seamlessly integrating funds, private banks and fund administrators. Through standardised regulatory compliant workflows that adapt to cross-border regulatory regimes, fintechs are critical facilitators of scale and operational efficiency. A collaborative path Despite these challenges, the trajectory of semi-liquid evergreen funds is decidedly upwards. The reason for optimism is simple: These structures address a real need. They enable wealth managers and family offices to craft portfolios that include the return potential of private equity, private credit, real estate and infrastructure without the severe liquidity lock-ups of the past. They enable successful GPs to expand their investor base and secure stable, long-duration capital. And they create opportunities for individual investors (and their advisers) to benefit from institutional-quality assets and managers. In short, evergreen funds are central to the democratisation of private markets – a theme that will only grow stronger. The writer is founder and CEO, S64 Capital
