With wealth managers increasingly seeking institutional-grade solutions for individual investors, evergreen private markets funds have emerged as one of the fastest-growing segments of the alternative investment universe. Few firms have been earlier, or more influential, participants in this evolution than Pantheon. The $82 billion private markets specialist launched its first wealth-focused vehicle in 1987 and is marking the 10-year anniversary of P-PEXX, one of the earliest registered private equity evergreen funds available to U.S. individuals. Since then, the firm has expanded its suite to include a credit secondaries strategy and multiple international evergreen vehicles.  

Mike Hutten, Partner and U.S. Head of Private Wealth, leads Pantheon’s product development, capital formation, and strategy efforts. He joins us to discuss how both retail and institutional investors are incorporating evergreen structures into modern allocations, how approaches differ across regions, and why private credit continues to attract strong demand from wealth clients seeking fixed-income alternatives. 

CM: How are wealth and institutional investors using evergreen funds today 

MH: Wealth investors are using evergreen funds to more efficiently build out their private market allocations across private equity, private credit, and real assets. Advisors are leaning into the evergreen structure for the ease of implementation and client reporting as well as the instant diversification of the evergreen strategy. With a single allocation, clients are diversified by manager, vintage, geography, sector, and stage. 

Institutional investors are using evergreen funds for many of the same reasons as wealth investors. Institutional investors with lower allocations to private investments are using evergreen funds to jump start their private market allocations or top off existing ones. In addition to getting more exposure to private investments, the continuous deployment allows institutional investors to more efficiently build a private investment program. 

CM: What attributes of evergreen structures—liquidity, smoother pacing, operational simplicity—are resonating most with advisors and their clients? 

MH: Advisors are gravitating toward evergreen structures primarily for their operational ease and investor-friendly experience. Eliminating capital calls, streamlining reporting, and easing onboarding removes much of the administrative burden. Smoother pacing and immediate deployment reduce the traditional J-curve, which resonates well with individual investors. Also, limited but predictable liquidity windows help advisors manage the cash flow needs of clients as well as rebalance portfolios. Overall, the evergreen structure aligns better with advisors’ asset allocation framework. 

CM: What are some of the most notable differences in how U.S. and international investors use these vehicles? 

MH: US and international investors access evergreen vehicles through different regulatory structures, but their underlying use cases are increasingly aligned. In the US, semi-liquid evergreen funds are typically offered through 40-Act tender or interval-fund structures. While international investors more commonly use SICAVs, ELTIFs, or regional feeder vehicles. Despite these structural differences, both US and international investors are leaning into these vehicles to more effectively build diversified portfolios with a single allocation. As the US market has evolved, we are finding more wealth platforms building model portfolios with multiple funds, which has de-emphasized the need to try to pick the best manager and shifted the focus to building a durable, diversified portfolio solution.  

CM: Are there regional variations in preferred asset classes—private equity, private credit, infrastructure, or real assets? 

MH: Across regions, private equity, private credit, and real assets remain the foundational allocations for both US and international wealth clients, reflecting shared global objectives of growth, income, and diversification. While private equity continues to be the largest private asset class worldwide, in the US, we are beginning to see advisors show a rising interest in infrastructure funds as they look to broaden their real asset exposure beyond real estate. Infrastructure offers diversification benefits since exposures typically show lower correlation to other asset classes and act as an inflation hedge, since contracts have inflation links. 

Outside the US, private equity continues to dominate but, we are seeing a pickup in demand in private credit in Asia. Meanwhile, Europe is increasingly allocating to infrastructure, a trend often linked to the region’s energy transition priorities and public-policy initiatives, as highlighted in the Global Infrastructure Hub’s Infrastructure Monitor 2024.  

CM: How are credit secondaries strategies helping investors navigate today’s rate and liquidity environment? 

MH: Credit secondaries offer investors seasoned, income-generating loan portfolios at potential discounts. Purchasing loan portfolios at a discount provides investors with capital appreciation opportunities along with downside protection. The liquidity profile for private investments has been challenging over the last couple of years. With lower amounts of liquidity from a reduced exit environment, institutions have been tapping into the secondary market to increase liquidity in their portfolios. These sellers are also using the secondary market as a portfolio management tool where they can express an opinion within private credit.  

CM: As evergreen structures proliferate, what innovations do you expect in the next generation of private markets products for the wealth channel? 

MH: It is difficult to predict what the innovation will be for evergreen funds in the next generation of private market products, but we would expect these products to address specific needs of private wealth investors. We expect to see greater emphasis on tax efficient structures, diversified income solutions, inflation protection features, and more optionality around liquidity. As the wealth channel continues to mature, we should also expect more product specialization with niche funds that target specific strategies, geographies and sectors.  

CM: Pantheon was early to the evergreen market—what lessons have you learned over the past decade that shape your product strategy today? 

MH: It is imperative to utilize a blended approach to evergreen fund management that combines LP secondaries with direct exposure through co-investments and GP-led secondaries. This approach can generate early performance and distributions while positioning the portfolio for long-term compounding. At the same time, maintaining ongoing diversification across current vintages with the use of primary funds allows investors to average into opportunities and reduce timing risk.  

Effective liquidity management remains essential, particularly as private markets structures evolve. Ultimately, the power of the private markets lies in allocating to premier GPs with demonstrated operational expertise, which drives value creation across market cycles. Given the complexity of these strategies, advisor education is critical to setting appropriate expectations, especially during challenging market environments. 

CM: How do you expect retail access to private markets to evolve over the next five years, particularly as advisors increase their alternatives exposure? 

MH: Over the next five years, we expect retail access to private markets to broaden significantly as advisors deepen their alternatives exposure. We expect to see the emergence of model portfolios designed for newer investors, alongside more sophisticated structures designed for UHNW clients. At the same time, we expect to see more large wealth platforms creating proprietary evergreen funds for their advisor networks, further accelerating adoption across the private wealth landscape. 

CM: What new evergreen categories—real assets, infrastructure, VC secondaries, value-add credit—do you believe will gain traction next? 

MH: Many evergreen categories appear well-positioned to gain traction as wealth investors broaden their private-markets exposure. Infrastructure stands out as we believe it is under allocated by wealth clients and the unique benefits versus other private investments will drive more adoption going forward. In private credit, senior direct lending funds have been one of the strongest areas of growth over the last decade, potentially leaving room for new opportunistic credit funds as investors look to expand their private credit exposure. Investors have also gravitated to PE secondaries and asset-class specific secondaries should also be in demand.  

CM: What advice would you give advisors who are beginning to incorporate evergreen private markets funds into client portfolios for the first time?  

MH: For advisors incorporating evergreen funds for the first time, manager selection and client education are critical. An important first step is to prioritize managers with longer-term track records over different market environments and cycles. Today, approximately 50% of the evergreen funds in market have less than a 3-year track record. As the private markets landscape has become more specialized, manager diversification is paramount. Equally important, it is imperative for advisors to set clear expectations with their clients around performance and liquidity.  

Evergreen funds should still be positioned as long-term investments, with liquidity viewed as a benefit – not a primary objective. Performance drivers in these vehicles take time, so patience and a focus on long-term outcomes, rather than short-term performance are key to a successful client experience.