Evergreen Fund
An evergreen fund is an open-ended or continuously operating fund that can accept new capital over time and may offer periodic liquidity, subject to terms.
Allocator relevance: Evergreen vehicles change liquidity, valuation, and governance dynamics—allocators must underwrite redemption mechanics and NAV integrity.
Expanded Definition
Evergreen funds do not have a single “fund life” like closed-end vehicles. They may allow subscriptions and redemptions on a schedule (monthly/quarterly/annual), often with gates or notice periods. This structure is common in some private credit, real estate, and hybrid strategies.
The key allocator question is whether the liquidity terms match the underlying assets. If assets are illiquid but redemptions are offered, governance must manage liquidity risk, gating, and valuation.
Decision Authority & Governance
Governance focuses on redemption rules (gates, queues), valuation policy, side pockets for illiquids, and conflict policies when allocating liquidity. Decision authority includes who can impose gates, adjust liquidity terms, or create side pockets.
Common Misconceptions
- Evergreen equals “liquid.”
- NAV-based liquidity is always reliable.
- Evergreen is just a marketing wrapper for a closed-end strategy.
Key Takeaways
- Underwrite the liquidity terms against asset liquidity.
- Valuation policy and gates are core governance.
- Evergreen structure shifts risk from exit timing to liquidity management.