Evergreen funds have grown rapidly because they make private markets more accessible, according to Brian Gildea, Managing Director of Evergreen Portfolio Solutions at Hamilton Lane.
In a wide-ranging conversation with Joncarlo Mark, founder of Upwelling Capital, and Liquid Courage host David Snow, Gildea walks through the investment sourcing and administrative mechanisms that make evergreen structures popular.
Key Takeaways:
- Evergreen funds shift the burden from investor to manager. Rather than committing capital that's drawn down over years, investors subscribe into a fully built portfolio on day one and choose their own timing for liquidity, subject to fund limits — while the manager takes on the ongoing work of portfolio construction and cash management.
- Secondaries (including continuation vehicles, which now make up roughly half the secondary market) help evergreen funds buy into pools of assets closer to liquidity, creating earlier diversification and cash flow, especially in younger funds.
- About two-thirds of Hamilton Lane's secondaries returns come from assets appreciating above NAV after purchase, with roughly a third from the initial discount to NAV captured at acquisition.
- Evergreen funds complement, not replace, drawdown funds. Larger institutions are increasingly using evergreen vehicles to hit allocation targets faster or build exposure early in a program's life, while continuing to use traditional funds alongside them.
Access the full transcript and a searchable content library at the Liquid Courage Substack.
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