{"concept_id":"ALTSS-STRUCT-009","slug":"evergreen-fund","canonical_name":"Evergreen Fund","aliases":["evergreen structure","perpetual fund"],"kind":"structure","authority":"industry","facets":["VEH"],"domains":["FUND-STRUCTURES"],"display_title":"Evergreen Fund","search_aliases":["what is an evergreen fund","evergreen private equity fund","evergreen vs closed-end fund","how do evergreen funds provide liquidity","evergreen fund performance fee","evergreen fund risks"],"one_sentence_definition":"An evergreen fund is a fund with no fixed end date that raises capital continuously or periodically and reinvests realisation proceeds, giving investors liquidity, if any, through redemptions, repurchase offers or a listing rather than a scheduled wind-down.","plain_english":"A traditional private equity fund is built to end after ten years or so. An evergreen fund is built to continue indefinitely: new money comes in, proceeds are reinvested, and investors leave by redeeming or selling. \"Evergreen\" says nothing on its own about how easy leaving is; that depends on the legal wrapper.","parent_concepts":["fund-structure"],"child_concepts":["semi-liquid-fund","interval-fund","tender-offer-fund"],"related_concepts":["open-end-fund","perpetual-capital","business-development-company","non-traded-reit","eltif","ltaf","gates"],"comparison_concepts":[],"not_the_same_as":[{"slug":"open-end-fund","distinction":"Open-end is a legal and liquidity classification (redeemable securities); evergreen describes the absence of a fixed term."},{"slug":"perpetual-capital","distinction":"Perpetual capital is a manager's classification of capital it is not required to return on a schedule; it includes evergreen funds but also listed vehicles and insurance balance sheets."},{"slug":"closed-end-fund","distinction":"A closed-ended private fund has a fixed term and distributes proceeds; a registered closed-end fund can, however, be evergreen."}],"formula_ids":[],"worked_examples":[],"sections":[{"heading":"What \"evergreen\" does and does not signal","paragraphs":["Evergreen is a market term, not a legal category. It describes term (none) and capital (recycled). The liquidity mechanism has to be read separately, and it falls into three groups. Open-end funds carry a redemption right: private hedge funds, open-end real estate and infrastructure funds, [UCITS](/glossary/ucits) and long-term asset funds (LTAFs). [Semi-liquid](/glossary/semi-liquid-fund) funds offer limited repurchases: interval funds, tender offer funds, non-traded business development companies (BDCs) and real estate investment trusts (REITs), and some European long-term investment funds (ELTIFs). Permanent capital gives investors no liquidity from the vehicle: listed vehicles, holding companies and insurance balance sheets (see [perpetual capital](/glossary/perpetual-capital))."]},{"heading":"Wrappers in use","paragraphs":["In the US: [interval funds](/glossary/interval-fund) under Rule 23c-3, [tender offer funds](/glossary/tender-offer-fund) using issuer tender offers under Rule 13e-4, perpetual-life non-traded BDCs, and [non-traded REITs](/glossary/non-traded-reit). Unregistered evergreen private funds rely on 3(c)(1) or 3(c)(7). In the EU: [ELTIFs](/glossary/eltif), which since ELTIF 2.0 (applying from 10 January 2024) may offer redemptions during their life, although each must still state a date for the end of its life; Luxembourg Part II undertakings for collective investment (UCIs); and reserved alternative investment funds (RAIFs). In the UK: the [LTAF](/glossary/ltaf), in force since November 2021 and opened to wider retail and defined contribution pension distribution by the Financial Conduct Authority's policy statement PS23/7."]},{"heading":"How it works","paragraphs":["Subscriptions are accepted monthly or quarterly at NAV, sometimes with a pending queue. NAV is struck monthly or quarterly, so valuation governance carries more weight than in a closed-end fund, where interim NAV does not set transaction prices: for registered funds and BDCs, Rule 2a-5 governs fair value determinations. Fees are charged on NAV, often with a performance fee or allocation on NAV gains above a high-water mark, rather than carry on realisations. Funds hold a [liquidity sleeve](/glossary/liquidity-sleeve) of cash or liquid credit, and may use credit facilities, to meet redemptions or repurchases."]},{"heading":"Liquidity management","paragraphs":["Liquidity is constrained by design: notice periods, [lock-ups](/glossary/lockup) or early-redemption fees, caps on repurchases per period, [gates](/glossary/gates), proration, and in stress, suspension. When requests exceed the cap, investors are paid pro rata and may have to resubmit. The International Monetary Fund's April 2024 Global Financial Stability Report counts growing semi-liquid vehicles, and stale or subjective valuations, among the vulnerabilities of private credit."]},{"heading":"How investors evaluate evergreen funds","paragraphs":["Investors compare: the share of NAV in illiquid assets versus the liquidity offered; how NAV is set and how often third-party valuations are obtained; the fee base and performance fee mechanics; history of meeting repurchases in full; and the effect of a cash sleeve on returns (cash drag). Because investors enter and exit at different NAVs, performance is reported as a [time-weighted return](/glossary/time-weighted-return), not a fund IRR, and is not directly comparable with closed-end vintage benchmarks."]}],"classification_rules":["Ask first whether investors have a right to redeem their interests at (approximately) NAV. If yes, the fund is open-end, whatever its name, even if gates and notice periods limit the right.","If there is no redemption right and liquidity comes only from sale to a third party, exchange listing, discretionary issuer tender offers or Rule 23c-3 repurchase offers, the fund is closed-end in the Investment Company Act sense.","Classify term separately from liquidity: \"evergreen\" or \"perpetual\" describes the absence of a fixed term; open-end, closed-end and semi-liquid describe the liquidity mechanism.","Classify the regulatory wrapper separately again: unregistered private fund (3(c)(1)/3(c)(7)), registered closed-end fund, BDC, REIT, UCITS, alternative investment fund (AIF), ELTIF, LTAF."],"calculation_rules":[],"common_mistakes":["Treating \"evergreen\" as meaning \"liquid\". Liquidity depends on the wrapper and can be gated or suspended.","Comparing an evergreen fund's time-weighted return with a closed-end fund's IRR.","Ignoring the performance fee mechanics on unrealised NAV gains."],"edge_cases":["An evergreen feeder may invest in closed-end underlying funds, combining a perpetual wrapper with drawdown assets.","Some evergreen funds charge early-repurchase fees in the first year, a soft lock-up."],"external_standard_mappings":[],"source_ids":["SRC-EU-ELTIF2-2023-606","SRC-EU-UCITS-2009-65","SRC-IMF-GFSR-2024-04-CH2","SRC-LU-UCI-LAW-2010","SRC-UK-FCA-COLL-15-LTAF","SRC-UK-FCA-PS23-7","SRC-US-ECFR-240-13E-4","SRC-US-ECFR-270-23C-3","SRC-US-ECFR-270-2A-5","SRC-US-USC-15-80A-3"],"citations":[{"source_id":"SRC-US-ECFR-270-23C-3","pinpoint":"17 CFR 270.23c-3(a)(1), (a)(3)","supports":"Interval fund repurchase offers every 3, 6 or 12 months for 5-25% of shares","source":{"source_id":"SRC-US-ECFR-270-23C-3","title":"17 CFR 270.23c-3 - Repurchase offers by closed-end companies (interval funds)","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/270.23c-3","publication_date":"eCFR current as of 2026-09-29; last amended 2021-08-01","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-ECFR-240-13E-4","pinpoint":"17 CFR 240.13e-4(a)(2), (f)(1)","supports":"Issuer tender offer definition; offers remain open at least 20 business days","source":{"source_id":"SRC-US-ECFR-240-13E-4","title":"17 CFR 240.13e-4 - Tender offers by issuers","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/240.13e-4","publication_date":"eCFR current as of 2026-09-29; last amended 2019-01-14","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-ECFR-270-2A-5","pinpoint":"17 CFR 270.2a-5(a)-(b), (c) (definition of fund)","supports":"Fair value determination framework for registered investment companies and BDCs","source":{"source_id":"SRC-US-ECFR-270-2A-5","title":"17 CFR 270.2a-5 - Fair value determination and readily available market quotations (Rule 2a-5)","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/270.2a-5","publication_date":"eCFR current as of 2026-09-29; last amended 2021-03-08 (effective date of adoption)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-EU-ELTIF2-2023-606","pinpoint":"Art. 1(10) (replacing Regulation (EU) 2015/760 Art. 18(1)-(2)); Art. 2","supports":"An ELTIF's rules must state a specific end-of-life date; redemptions during its life permitted on conditions; ELTIF 2.0 applies from 10 January 2024","source":{"source_id":"SRC-EU-ELTIF2-2023-606","title":"Regulation (EU) 2023/606 amending Regulation (EU) 2015/760 (ELTIF 2.0)","authors":"European Parliament and Council","publisher":"Official Journal of the EU, L 80, 20.3.2023","document_type":"regulation","url":"https://eur-lex.europa.eu/eli/reg/2023/606/oj/eng","year":2023,"publication_date":"Adopted 15 March 2023; applies from 10 January 2024","jurisdiction":"EU","status":"In force","last_verified":"2026-10-01"}},{"source_id":"SRC-UK-FCA-COLL-15-LTAF","pinpoint":"COLL 15.1.1R (in force 15/11/2021)","supports":"LTAF regime in force from 15 November 2021","source":{"source_id":"SRC-UK-FCA-COLL-15-LTAF","title":"FCA Handbook COLL 15: Long-term asset funds","authors":"Financial Conduct Authority","publisher":"FCA","document_type":"regulation","url":"https://www.handbook.fca.org.uk/handbook/COLL/15/","year":2021,"publication_date":"In force from 15 November 2021; amended since","jurisdiction":"UK","status":"In force","last_verified":"2026-10-01"}},{"source_id":"SRC-UK-FCA-PS23-7","pinpoint":"Title page (June 2023); para. 1.2","supports":"PS23/7 broadened retail and pensions access to the LTAF; the LTAF is an authorised open-ended fund","source":{"source_id":"SRC-UK-FCA-PS23-7","title":"PS23/7: Broadening retail and pensions access to the long-term asset fund","authors":"Financial Conduct Authority","publisher":"FCA","document_type":"guidance","url":"https://www.fca.org.uk/publication/policy/ps23-7.pdf","year":2023,"publication_date":"June 2023","jurisdiction":"UK","status":"Final policy","last_verified":"2026-10-01"}},{"source_id":"SRC-IMF-GFSR-2024-04-CH2","pinpoint":"Chapter 2 at a Glance, p. 53; p. 65","supports":"A growing share of semiliquid investment vehicles and stale valuations among private credit vulnerabilities; mark-to-model valuations inherently subjective","source":{"source_id":"SRC-IMF-GFSR-2024-04-CH2","title":"Global Financial Stability Report, April 2024, Chapter 2: The Rise and Risks of Private Credit","authors":"IMF staff (team led by Caio Ferreira and Nobuyasu Sugimoto)","publisher":"International Monetary Fund","document_type":"paper","url":"https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2.pdf","year":2024,"publication_date":"April 2024 GFSR (\"The Last Mile\"), published 16 April 2024","jurisdiction":"intl","status":"Published","last_verified":"2026-10-01"}},{"source_id":"SRC-LU-UCI-LAW-2010","pinpoint":"Part II","supports":"Part II of the Luxembourg UCI Law governs UCIs other than UCITS","source":{"source_id":"SRC-LU-UCI-LAW-2010","title":"Law of 17 December 2010 relating to undertakings for collective investment (UCI Law; SICAV) - CSSF consolidated text","authors":"Grand Duchy of Luxembourg; consolidation by CSSF","publisher":"CSSF","document_type":"law","url":"https://www.cssf.lu/wp-content/uploads/L_171210_UCI.pdf","year":2010,"publication_date":"Consolidated text updated 10 May 2026","jurisdiction":"LU","status":"In force (as amended)","last_verified":"2026-10-01"}},{"source_id":"SRC-EU-UCITS-2009-65","pinpoint":"Art. 1(2)(b)","supports":"UCITS units are repurchased or redeemed at the request of holders","source":{"source_id":"SRC-EU-UCITS-2009-65","title":"Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)","publisher":"European Parliament and Council (Official Journal L 302, 17.11.2009, p. 32; text via Publications Office)","document_type":"directive","url":"https://eur-lex.europa.eu/eli/dir/2009/65/oj/eng","publication_date":"OJ L 302, 17.11.2009; as amended (including by Directive (EU) 2024/927)","jurisdiction":"EU","status":"in force","last_verified":"2026-10-02"}},{"source_id":"SRC-US-USC-15-80A-3","pinpoint":"Sec. 3(c)(1), 3(c)(7)(A)","supports":"Exclusions relied on by unregistered private funds","source":{"source_id":"SRC-US-USC-15-80A-3","title":"15 U.S.C. 80a-3 - Definition of investment company (Investment Company Act sec. 3, incl. 3(c)(1) and 3(c)(7))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80a-3","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}}],"faq":[],"seo":{},"first_published":"2026-01-06","last_reviewed":"2026-10-02","last_modified":"2026-10-02","content_version":"2.0.0","url":"https://altss.com/glossary/evergreen-fund","json_url":"https://altss.com/reference/concepts/evergreen-fund.json","title":"Evergreen Fund","formulas":[],"sources":[{"source_id":"SRC-EU-ELTIF2-2023-606","title":"Regulation (EU) 2023/606 amending Regulation (EU) 2015/760 (ELTIF 2.0)","authors":"European Parliament and Council","publisher":"Official Journal of the EU, L 80, 20.3.2023","document_type":"regulation","url":"https://eur-lex.europa.eu/eli/reg/2023/606/oj/eng","year":2023,"publication_date":"Adopted 15 March 2023; applies from 10 January 2024","jurisdiction":"EU","status":"In force","last_verified":"2026-10-01"},{"source_id":"SRC-EU-UCITS-2009-65","title":"Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)","publisher":"European Parliament and Council (Official Journal L 302, 17.11.2009, p. 32; text via Publications Office)","document_type":"directive","url":"https://eur-lex.europa.eu/eli/dir/2009/65/oj/eng","publication_date":"OJ L 302, 17.11.2009; as amended (including by Directive (EU) 2024/927)","jurisdiction":"EU","status":"in force","last_verified":"2026-10-02"},{"source_id":"SRC-IMF-GFSR-2024-04-CH2","title":"Global Financial Stability Report, April 2024, Chapter 2: The Rise and Risks of Private Credit","authors":"IMF staff (team led by Caio Ferreira and Nobuyasu Sugimoto)","publisher":"International Monetary Fund","document_type":"paper","url":"https://www.imf.org/-/media/files/publications/gfsr/2024/april/english/ch2.pdf","year":2024,"publication_date":"April 2024 GFSR (\"The Last Mile\"), published 16 April 2024","jurisdiction":"intl","status":"Published","last_verified":"2026-10-01"},{"source_id":"SRC-LU-UCI-LAW-2010","title":"Law of 17 December 2010 relating to undertakings for collective investment (UCI Law; SICAV) - CSSF consolidated text","authors":"Grand Duchy of Luxembourg; consolidation by CSSF","publisher":"CSSF","document_type":"law","url":"https://www.cssf.lu/wp-content/uploads/L_171210_UCI.pdf","year":2010,"publication_date":"Consolidated text updated 10 May 2026","jurisdiction":"LU","status":"In force (as amended)","last_verified":"2026-10-01"},{"source_id":"SRC-UK-FCA-COLL-15-LTAF","title":"FCA Handbook COLL 15: Long-term asset funds","authors":"Financial Conduct Authority","publisher":"FCA","document_type":"regulation","url":"https://www.handbook.fca.org.uk/handbook/COLL/15/","year":2021,"publication_date":"In force from 15 November 2021; amended since","jurisdiction":"UK","status":"In force","last_verified":"2026-10-01"},{"source_id":"SRC-UK-FCA-PS23-7","title":"PS23/7: Broadening retail and pensions access to the long-term asset fund","authors":"Financial Conduct Authority","publisher":"FCA","document_type":"guidance","url":"https://www.fca.org.uk/publication/policy/ps23-7.pdf","year":2023,"publication_date":"June 2023","jurisdiction":"UK","status":"Final policy","last_verified":"2026-10-01"},{"source_id":"SRC-US-ECFR-240-13E-4","title":"17 CFR 240.13e-4 - Tender offers by issuers","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/240.13e-4","publication_date":"eCFR current as of 2026-09-29; last amended 2019-01-14","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-ECFR-270-23C-3","title":"17 CFR 270.23c-3 - Repurchase offers by closed-end companies (interval funds)","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/270.23c-3","publication_date":"eCFR current as of 2026-09-29; last amended 2021-08-01","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-ECFR-270-2A-5","title":"17 CFR 270.2a-5 - Fair value determination and readily available market quotations (Rule 2a-5)","publisher":"U.S. Securities and Exchange Commission (CFR text via eCFR; LII mirror)","document_type":"regulation","url":"https://www.law.cornell.edu/cfr/text/17/270.2a-5","publication_date":"eCFR current as of 2026-09-29; last amended 2021-03-08 (effective date of adoption)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-USC-15-80A-3","title":"15 U.S.C. 80a-3 - Definition of investment company (Investment Company Act sec. 3, incl. 3(c)(1) and 3(c)(7))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80a-3","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}]}