The fund types
Private markets reach advisory portfolios through a defined set of structures. Each solves a different problem, and each imposes a different client experience.
Drawdown (closed-end) funds
The traditional private equity vehicle is the drawdown fund: investors commit capital; the manager calls it over several years as investments are made, and distributions return over a fund's life of roughly 10 to 12 years. Drawdown funds give managers maximum control over timing, which supports disciplined entry and exit. For investors, they demand cash-flow management: committed capital must be available when called, and the timing of both calls and distributions is uncertain.
The client profile that fits are specific: investors who can tolerate long illiquidity, manage unpredictable cash flows, and think in fund-life horizons.
Evergreen and perpetual (semi-liquid) structures
Evergreen structures, sometimes called perpetual or semi-liquid funds, remove capital-call mechanics. Investors subscribe at net asset value; capital is deployed immediately into an existing portfolio, and the fund offers periodic, limited opportunities to redeem. There is no fixed end date. The family includes interval funds, tender offer funds, non-traded BDCs, and non-traded REITs, and "evergreen" and "semi-liquid" are industry descriptions, not single legal definitions. For an overview of the category's flagship structure, read BIP Capital's article What Is an Evergreen BDC Fund?
The category is growing quickly. Morningstar and PitchBook's Evergreen Fund Landscape research reports that evergreen structures collectively held $534.6 billion in assets by year-end 2025, up more than 25% from a year earlier, with projections to surpass $1 trillion by 2029.9 Industry data shows interval funds alone reached about $132 billion across 147 funds by year-end 2025.10 Deloitte characterizes semi-liquid funds as a multi-trillion-dollar opportunity for both traditional and alternative managers.11
Interval funds versus tender offer funds
Two registered structures anchor the semi-liquid category, and the difference between them is the difference between mandatory and discretionary liquidity.
- Interval funds must make periodic repurchase offers under SEC Rule 23c-3, commonly 5% of shares per quarter.12 The offer is required; the amount is capped.
- Tender offer funds may make repurchase offers at net asset value, but the offers are at the board's discretion. Liquidity is expected in practice but not guaranteed by rule.
Chapter 6 examines what these mechanics mean when many investors want liquidity at once.
Business Development Companies (BDCs)
A Business Development Company is a closed-end vehicle created under the Investment Company Act of 1940 to channel capital to small and mid-sized US companies. BDCs must distribute at least 90% of taxable income to shareholders to maintain regulated investment company (RIC) pass-through tax treatment, which is why they are commonly income-oriented and issue Form 1099s rather than Schedule K-1s.13 Some BDCs trade on exchanges, where share prices can diverge from net asset value. Non-traded and evergreen BDCs transact at NAV and offer periodic liquidity instead of daily trading.
Feeder funds and funds-of-funds
Feeder funds aggregate smaller commitments into a single vehicle that invests in a larger underlying fund, giving advisors access to managers whose direct minimums would otherwise be out of reach. Funds-of-funds diversify across multiple managers through a single commitment. Both add a layer of fees in exchange for access and diversification; a trade-off advisors should evaluate explicitly rather than accept by default.
Registered offerings versus private placements
Registration changes the investor experience. Registered vehicles, including interval funds and many non-traded BDCs, file public disclosures, deliver standardized reporting, and can often accept accredited or, in some cases, broader categories of investors. Private placements offer managers more flexibility and investors less standardized transparency and generally require higher eligibility tiers. Neither is inherently better; they answer different needs.
Two vehicles on the BIP Capital platform illustrate how evergreen BDC design choices differ by objective. They are two distinct funds with different strategies, described here for educational purposes only.
The design lesson generalizes beyond any platform: a growth-oriented equity strategy and an income-oriented credit strategy can share the evergreen BDC wrapper while serving entirely different roles in a portfolio.
How access works: the mechanics for an RIA
Knowing the fund types is half the picture. The other half is operational: what happens between an advisory firm’s decision to allocate and a funded, monitored client position. The process varies by structure and platform, but a typical path runs through five stages.
Step 1: Confirm eligibility and account fit
Access begins with verification, not paperwork. The advisor confirms the client's eligibility tier (accredited investor, qualified client, or qualified purchaser, covered in Chapter 5), confirms that the target account can hold the asset, and checks custodian policy. Not every custodian supports every alternative structure, and retirement accounts add custodial and eligibility wrinkles of their own. Establishing this before selecting a fund prevents the most common operational dead end.
Step 2: Choose the access channel
RIAs typically reach private funds through one of three channels, and the choice shapes minimums, paperwork, and reporting.
- Custodial and platform access. Many advisors access funds through their custodian alternative investment platform or a third-party alternatives platform integrated with it. These channels streamline subscription processing, position reporting, and fee billing, and often carry negotiated minimums.
- Direct subscription. Advisors can subscribe clients directly with the fund sponsor. This is the standard path for evergreen BDCs and many private placements, and it puts the advisor closer to the sponsor's own investor relations and reporting.
- Feeder vehicles. Where a target manager's direct minimum is out of reach, a feeder aggregates client commitments, at the cost of an additional fee layer that should be weighed explicitly.
Step 3: Subscription documents and funding
Every private fund investment runs through a subscription process: the subscription agreement, investor questionnaire attesting to eligibility, anti-money-laundering and know-your-customer documentation, and, for advisory accounts, the advisor's own authorization workflow. For evergreen funds with periodic closes, quarterly is common; set document deadlines ahead of each close, and funding follows at the close date at that period's NAV. Drawdown funds work differently: signing creates a commitment, and cash moves later through capital calls, which the advisor must track and the client must be positioned to meet.
Step 4: Ongoing operations
After funding, the operational work shifts to monitoring: reconciling positions and valuations with the custodian, processing distributions (and reinvestment elections in evergreen vehicles), tracking capital calls in drawdown programs, collecting K-1s or 1099s each tax season, and reviewing manager reporting against the diligence expectations set at purchase (Chapter 10). Firms that treat this as a defined workflow, with owners and deadlines, scale private markets programs successfully; firms that treat it as ad hoc correspondence do not.
Step 5: Liquidity requests and exits
Exits are scheduled events, not transactions. In evergreen structures, the advisor submits repurchase requests within the fund's window and manages the possibility of proration. In drawdown funds, capital returns through distributions on the manager's timetable, and an early exit means a secondary sale, typically at a discount to net asset value. Chapter 6 provides the liquidity framework; the operational point is that exit mechanics should be understood and explained to the client before the subscription is signed, not when liquidity is needed.
Key takeaway: drawdown versus evergreen at a glance