There’s growing momentum behind evergreen and semi-liquid funds as a “better” way to access private markets. On the surface, the appeal is clear: lower minimums, easier onboarding, and more frequent liquidity windows. But when every fund starts to look the same, and “hundreds upon hundreds” of new evergreen vehicles flood the market, we should pause to ask, “who is this really built for?”
In many cases, the answer isn’t the end investor. It’s the distributor.
When Packaging Becomes the Product
The rise of evergreen funds reflects a broader trend in the wealth channel – packaging is becoming the product. Designed to capture flows, not necessarily deliver outcomes, these funds emphasize access and scale over alignment and performance. Liquidity is often promoted as a core benefit, but in practice, it can be more illusion than reality. A 5% quarterly redemption limit might suffice in steady markets, but when volatility spikes and investors rush to exit, good luck.
Rapid capital deployment, a hallmark of many evergreen structures, can backfire in asset classes that require thoughtful pacing. The 2020-2021 growth equity vintages offer a cautionary tale with too much capital deployed too quickly, inflated valuations, and compressed returns. In long-duration strategies like private equity and venture, disciplined deployment over time isn’t a constraint; it’s a competitive advantage.
At Gridline, we believe the future of private markets isn’t just about more access.