Private markets, once the domain ofinstitutional 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 – including Europe’s updated ELTIF 2.0, the UCI Part II and the UK’s Long-Term Asset Fund (LTAF) to U.S. interval funds, non-traded BDCs, and REITs, 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 to Private Markets
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 these new structures far more palatable. Over the past 5 years, the number of evergreen funds has nearly doubled to 520, representing at least $350bn of net asset value (Preqin).
This trend aligns with a broader industry movement towards democratisation. Currently, private investors represent nearly half of global wealth—estimated at over $140 trillion—yet account for only 16% of private markets' total assets under management, which currently stand at $13.1 trillion The runway for growth remains extensive, and semi-liquid evergreen funds are a crucial bridge to narrowing this gap.
Many in the wealth management channel have embraced the semi-liquid evergreen fund structure as their preferred private markets entry-point. Their open-ended nature means that capital can be deployed on day one and begin compounding sooner. It is hard to find a private markets GP today that is not actively exploring the private wealth opportunity set and exploring the viability of launching a semi-liquid evergreen fund. For private wealth intermediaries and their clients there is now a comprehensive and growing menu of private assets in semi-liquid evergreen format. The market is populated with a diversity of opportunity 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 now starting to manufacture their own internal semiliquid evergreen funds of funds as an alternative to traditional closed-ended vintage programmes.
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 these new structures far more palatable.
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 these new structures far more palatable.
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 these new structures far more palatable.
Tarun Nagpal, S64
Innovation in Fund Structures and Strategies
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 openended and closed-ended funds, which introduces operational complexity. GPs and their service providers must master new processes: 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 NAV 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 EU, along with tax incentives and a clearer rulebook. The UK introduced the LTAF, and the U.S. has long-standing semi-liquid structures – interval funds, tender offer funds, and on-traded BDCs REITs. Other regions are catching up: in Asia, markets like Hong Kong, Singapore andAustralia 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 such as S64 come into the equation, serving as outsourced
product manufacturers and operations hubs, seamlessly integrating funds, private banks and fund administrators. Through standardized regulatory compliant workflows adaptive to cross-border regulatory regimes, fintechs are critical facilitators of scale and operational efficiency.
A Collaborative Path to a New Era
Despite these challenges, the trajectory of semiliquid evergreen is decidedly upwards. The reason for optimism is simple: these structures address a real need. They allow 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 lockups of the past. They allow successful GPs to expand their investor base and secure stable, long duration capital. And they create opportunities for individual investors (and their advisors) to benefit from institutional-quality assets and managers. In short, evergreen funds are central to the democratization of private markets – a theme that is only growing stronger.
Tarun Nagpal, Founder & CEO, S64
