Evergreen fund

An evergreen fund, or permanent-capital fund, is an investment vehicle with no predefined liquidation date. It stands in contrast to the classic closed-end fund, built around a Vintage year (private equity) and a limited life, at the end of which assets must be sold and capital returned to subscribers. The evergreen fund, by contrast, reinvests the proceeds of disposals and can hold its stakes with no imposed horizon.

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This structure offers several advantages: an investment horizon aligned with the long time of certain businesses, the absence of pressure to sell at the end of a fund's life, and liquidity management through periodic subscriptions and redemptions rather than a global liquidation. It appeals to investors seeking durable exposure to the unlisted space, without the Commitment and drawdown (private equity) and distribution cycle specific to closed-end funds.

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By way of example, where a closed-end fund must sell its assets before its tenth year, an evergreen fund keeps a performing stake beyond that, reinvests the proceeds of disposals and settles investor entries and exits on the basis of a periodic net asset value.

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Its counterpart is a framed liquidity and a decisive periodic net asset value, since it is on that value that entries and exits settle. The evergreen model is enjoying renewed interest, notably to open private equity to a broader investor base, which makes it a structuring trend in unlisted asset management.