ANALYSIS: “Evergreen” Private Markets Funds; Should Investors Be Wary? – Part 1

Tom Burroughes

17 February 2026

The rapid growth of private market investing has seen the rise of open-ended “evergreen” funds, sometimes called “perpetuals.” Their ascent has been associated with the idea that assets, which were once dominated by large institutions and ultra-HNW individuals, are becoming “democratised.”

But open-ended, semi-liquid structures bring risks and investors who haven’t lived through a protracted market downturn might find that the ride is rough, people in the industry say.

Large firms such as Blackstone, Carlyle, Hamilton Lane and KKR have launched evergreen funds, often as part of a build-out of private wealth channels. Now an industry buzzword, “evergreen” describes a fund that doesn’t come with the drawdowns, capital calls, exit deadlines and other traditional features of private market entities. By deploying capital immediately rather than waiting to deploy the "dry powder," there is no cash “drag,” managers of these funds say.

A decade of ultra-low rates after 2008 helped drive the private markets story, even though the post-Covid interest rate spike cooled fundraising and left large institutional investors with indigestion and a longer wait for returns on their money than they had bargained for.

Cautionary points are not an attempt to dampen investors’ enthusiasm and desire to capture new sources of return, but with heavy inflows going on, and more retail and money at stake, it makes sense to be careful.

“The issues tend to arise with affluent/retail private clients who may not have all the information and influence that larger investors have,” Claire Madden, co-founder and managing partner, , a UK-based investment business, told this publication. “These retail investors, particularly if inappropriately targeted, may need liquidity more urgently in the event of a market dislocation and redemption demand may force the fund to sell its prize assets in a market which will know the fund is a distressed seller.”

The pullout from UK property funds unit trusts after the Brexit referendum in 2016 was an example of how funds that don’t use a closed-ended structure can be vulnerable, and it is important for the industry to understand how it could deal with redemptions, Madden said. (After Brexit and other episodes, the Financial Conduct Authority started a major probe into open-ended funds, with the intention of curbing liquidity mismatches.)

, an independent third-party management firm, carried out a survey early this year with 200 C-suite fund management figures in the US and Europe. In a study issued today, it found that 89 per cent plan to launch semi-liquid structures in the next two years.

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