Evergreen fund launches reach decade high

Evergreen private market fund launches hit a decade high in 2025, with a total of 123 new funds introduced during the year, according to Preqin data.

Private debt and private equity were the most active sectors, accounting for 49 and 32 new fund launches, respectively.

Evergreen funds offer lower investment minimums and regular liquidity opportunities, making them better suited to retail investors than the private market funds designed for institutional investors, which can lock up capital for a decade or more.

Private markets continue to expand their role in capital allocation after more than a decade of growth, and "evergreen funds are really about structuring these opportunities so that retail investors have access to a lot of this growth," David McNatt, executive vice president and chief wealth solutions officer at investment manager AssetMark Inc., told S&P Global Market Intelligence.

McNatt said private market opportunities have become more appealing recently due to a friendlier macro backdrop as inflation cools and central banks pause or reverse rate hikes.

Private capital fueled more than a quarter of M&A deals in 2025, McNatt said. A surge in private credit has accelerated leveraged transactions, supporting dealmaking and financing flexibility. Despite heightened deployment, the industry ended the year with $2 trillion in dry powder.

Private equity also rebounded, including 13 deals above $10 billion, alongside renewed take-private activity.

Among private assets, private credit, private equity and real assets are getting strong interest from retail and wealth investors, according to McNatt.

"People understand credit, they understand equity, and they understand real assets like infrastructure," he said.

Yearning for yield

Retail investors are turning to private markets to boost portfolio income and broaden economic exposure, said Luke Sarsfield, CEO of investment manager Ridgepost Capital, formerly P10 Intermediate Holdings.

Many are seeking yield beyond traditional liquid fixed income and accepting reduced liquidity in exchange for higher potential returns — often delivered as income in private credit and real estate strategies, Sarsfield said. Others are pursuing capital appreciation through private equity and venture capital.

The shift is also fueled by the shrinking share of the economy represented by public markets, making it harder to capture broad US growth with only public stocks and bonds. Individual investors also want access to innovation-led themes — from technology and generative AI to energy and space — that are still largely private.

"Individual investors view [private market investment] as a substantial trend and growth accelerant and want to have exposure to that in their portfolio," Sarsfield said.

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Risk

As the US eases restrictions to allow ordinary people access to private market assets, recent headlines have raised concerns.

"The biggest risk when it comes to retail wealth is they do not have the investment expertise and experience of an institutional investor," McNatt said. "Retail investors have a history of often not being very patient, being a little bit trend following. In private markets, that can really play against the opportunity there."

McNatt added that getting the liquidity expectations right is critical for both the success of retail investors and managers.

"We will have a credit event at some point in both public and private markets. There are credit cycles. In public markets, the investors can take their liquidity, which comes at a real cost. But in the private markets, if you're a GP managing private credit, you want to avoid these panicking investors because you don't want to be forced to face unnecessary write-downs on quality assets," McNatt said.

The biggest challenge is investor education, according to Mitchell Caplan, CEO of Willow Wealth.

"Unfortunately, educational rigor has been uneven across the industry, which leads to mismanaged expectations among many individual investors who are new to these asset classes," Caplan said in an emailed commentary.

"Private assets work well in retail portfolios, but only when investors go in with a clear-eyed understanding of what they are designed to do. Private assets provide the kind of diversification that was once only available to institutional investors and the very wealthy," Caplan said.

Paul Atkins, chair of the US Securities and Exchange Commission, said during an SEC roundtable on March 4 that the SEC's focus is on "reasonable retailization of posttax, pre-retirement dollars for investors, embracing growth and innovation across all asset classes while protecting investors through guardrails."

"The presence of risk is not the grounds for the perpetuation of exclusion," he said.