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Evergreen Structures Primer

Overview
Why Private Credit, Why Now
The Evolution of Private Markets
Why Structure Literacy Now Matters
Where Do RIAs Stand Today on Private Markets?
Understanding the Capital Stack
Private Equity, Venture Capital and Private Credit: A Structural Guide
From Drawdown to Evergreen: How Fund Structures Evolved
What Are the Building Blocks of Private Equity?
Evaluating Managers and Track Records
Evaluating Private Market Risk and Return Frameworks
How Evergreen Structures Work
The J-Curve, Vintages, and Why Manager Selection Dominates
Structuring an Allocation
Regulatory and Structural Basics
The Vehicle Landscape
The Options for Accessing Private Markets
Reporting and Client Communication
Where Private Markets Fit
What Evergreen Changes — and What It Does Not
Who Can Invest? Accreditation Tiers and What Each Unlocks
Featured Private Market Asset Classes
The Diligence the Structure Requires
Managing Portfolio Liquidity in Private Markets
How to Talk About Private Markets with Clients
Portfolio Construction and Pacing
Fiduciary and Regulatory Responsibilities When Recommending Private Markets
Building Confidence, Systematically
Communicating Evergreen Structures to Clients
How Do Private Equity and Private Credit Fit into a Client Portfolio?
Where BIP Capital Fits
A Structural Diligence Framework
Private Credit as a Complement to Private Equity
How Should RIAs Evaluate a Private Markets Manager?
Common Objections and Misconceptions, and Evidence-Based Responses
Tax Considerations Across Private Markets Structures
Next Steps — Continuing Your Private Markets Education
Chapter
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The Diligence the Structure Requires

What extra diligence does the structure require?

Closed-end diligence concentrates on the manager and the strategy. Evergreen diligence must do all of that and then underwrite the wrapper as a separate object, because the wrapper holds the structure-specific risks. Five lines of inquiry distinguish structural diligence from ordinary manager diligence.

  1. Liquidity architecture. Is liquidity provided by a mandatory rule, as in an interval fund, or at the discretion of a board, as in a tender-offer fund or a non-traded BDC? What is the cap per period and per year, is oversubscription filled pro rata, and what are the notice and settlement terms? Under exactly what conditions can the mechanism be suspended, and who holds that authority?
  2. Liquidity sleeve and deployment discipline. How large is the sleeve, and what does it hold? Does its size reconcile with the return the vehicle targets, given that a larger sleeve buys more redemption resilience at the cost of more return dilution? And is there deployment pressure in the other direction — could continuous inflows outrun available deal flow and pull the manager toward weaker assets simply to stay invested?
  3. Valuation control. Who determines net asset value, on what cadence, and from what inputs? Is an independent valuation agent engaged, who retains and pays it, and how is that conflict managed? How stale can a NAV be between strikes, and how is subscription and redemption priced against a NAV that may lag the market?
  4. Fee and leverage layering. On a like-for-like basis, how do total fees compare — management, incentive, and any financing or sleeve costs? Does the vehicle employ leverage, within what limits, and how does leverage interact with subscriptions and redemptions transacted at NAV?
  5. Denominator and flow dynamics. How concentrated is the investor base, and what happens to the investors who remain if a large cohort redeems into a capped window? A queue lengthens; NAV-strike timing matters; and the position of a patient holder is affected by the behavior of impatient ones. Is the vehicle still in net inflow, and what changes if flows turn?

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