Evergreen Funds: A New Era in Private Markets
The private markets landscape is undergoing a profound transformation as evergreen structures—interval funds, tender offer funds, and other semi-liquid vehicles—move from the periphery into the mainstream. According to PitchBook’s latest analyst note, The Return of Evergreen Funds, wealth-focused evergreen funds have surpassed $400 billion in net assets, with U.S.-registered interval and tender offer funds alone crossing the $110 billion threshold in 2025, doubling in size over just three years. This remarkable growth reflects both structural innovation and a fundamental shift in investor demand. Yet it also raises important questions: What exactly are investors getting in return? How should performance be measured in the absence of standardized benchmarks? And what risks lie beneath the surface of these rapidly proliferating vehicles?
Evergreen Structures: Old Idea, New Audience
While evergreen funds are often portrayed as cutting-edge, they are hardly new. Open-end real estate and timberland funds have existed for decades, while business development companies (BDCs) and non-listed REITs have long blurred the public–private boundary. What has changed is the target audience: high-net-worth investors and financial advisors seeking access to institutional-quality private assets without the complexity of closed-end fund commitments.
These vehicles promise smoother access, simplified reporting, and intermittent liquidity. They are also being repackaged to resemble the experience of mutual funds or ETFs, albeit with significantly higher fees. PitchBook estimates that the total universe of evergreen private market funds could surpass $1 trillion in assets within five years.
Performance: A Heterogeneous Picture
Despite rapid adoption, performance remains highly uneven. PitchBook’s analysis of Morningstar data shows meaningful dispersion both within and across strategies. Over the 12 months ending April 2025:
- Private equity evergreen funds delivered a median return of 13.8%.
- Private debt funds returned 7.8%.
- Real estate funds lagged at 3%.
This variation underscores that evergreen wrappers may appear standardized, but outcomes depend heavily on portfolio construction, strategy, and flow dynamics. Secondaries-focused strategies, for instance, generated double-digit returns in the short term, aided by discounted acquisitions and early NAV write-ups. Yet PitchBook warns that these gains may not be sustainable, with three-year top-quartile performance in secondaries falling behind that of private debt.
Moreover, evergreen funds are still largely untested across market cycles. Many have fewer than five years of history, making long-term risk-adjusted comparisons difficult. The collapse of the Wildermuth Fund, which entered liquidation in 2023 after sustained outflows and sharp write-downs, serves as a cautionary tale of what can happen when liquidity mismatches collide with poor performance.
Benchmarking Challenges
One of the most persistent issues facing evergreen funds is the lack of standardized benchmarks. Managers often compare returns to public indices like the Russell 2000 or leveraged loan indexes. These may be familiar to investors but are rarely representative of evergreen strategies’ liquidity profiles, risk exposures, or underlying assets.
PitchBook proposes a different approach: peer-based evergreen fund indexes. By constructing a suite of preliminary indexes based on 111 interval and tender offer funds totaling $101 billion in assets, PitchBook offers a framework for comparing performance across categories such as private debt, real estate, infrastructure, private equity, and secondaries.
For example, the Cliffwater Corporate Lending Fund (CCLFX), the largest interval fund at nearly $30 billion in assets, has outperformed its peer private debt index by roughly 25 percentage points since 2020, illustrating both the value and necessity of peer-based benchmarking.
Implications for Investors
The findings from PitchBook’s research highlight both promise and peril:
- Promise: Evergreen funds democratize access to private markets, particularly for the wealth channel, and provide new sources of capital for general partners at a time when traditional fundraising is slowing.
- Peril: Performance dispersion, structural risks, and the absence of robust benchmarks mean that investors must tread carefully. As PitchBook stresses, many evergreen vehicles remain untested in prolonged downturns.
Ultimately, the sustainability of evergreen funds will depend on their ability to deliver competitive risk-adjusted returns while preserving investor confidence during periods of stress. Establishing credible benchmarks is central to that effort. Without them, allocators risk making allocation decisions without the tools to measure value, risk, and role in portfolio construction.
Conclusion
Evergreen funds have returned—not as a niche solution but as a central feature of the evolving private markets landscape. With assets poised to exceed $1 trillion, they represent one of the fastest-growing innovations in fund structures. Yet growth alone is not enough. Investors, managers, and the industry at large must now grapple with the harder questions of benchmarking, risk management, and long-term viability.
As PitchBook’s analysis makes clear, evergreen funds are here to stay—but whether they deliver on their promise will hinge on what lies beneath the wrapper.
