Private Markets—Setting off into a new investment universe

Most evergreen products feature lower minimum investment requirements than traditional private market structures. This broadens access and enables a wider range of investors to participate in private markets.

Investors in evergreen products gain immediate exposure to a diversified, existing portfolio of private market investments. This provides instant access to a broad range of privately held companies without the need to build exposure over time.

The ability to subscribe and redeem on a monthly or quarterly basis provides investors with the flexibility to deploy and withdraw capital at their discretion. Access via ISINs further simplifies the investment process. Investors can gain exposure efficiently without navigating the operational complexity of traditional structures, while the streamlined setup reduces administrative requirements.

Evergreen products involve a liquidity mismatch, as investors may redeem their shares periodically while the underlying assets are less liquid by nature. In periods of elevated redemption activity, this can put pressure on portfolio liquidity. To address this, fund managers implement a range of mechanisms, including liquidity buffers and product suspensions. These measures are designed to balance investor liquidity with the long-term nature of the underlying investments and to avoid forced asset sales.

To meet potential redemption requests, fund managers typically hold between 5% and 15% of net asset value in cash or liquid assets. This liquidity allocation can have a dampening effect on target returns compared to traditional structures.

Subscriptions and redemptions in evergreen products are executed based on net asset value. As a result, investors rely on the fund manager to value the underlying assets fairly and consistently. Robust valuation processes are therefore critical to ensure transparency and investor confidence.