This is a sponsored advertorial from Neuberger Berman.

In a fast-evolving private equity market, evergreen funds are increasingly standing out as a compelling and flexible alternative to traditional close-ended funds.

For decades, individual investors have built their wealth primarily through public markets. But the landscape is shifting, with fewer companies opting to list publicly and a growing share of value creation occurring in privately held businesses. As private markets become more central to economic growth, interest in accessing those opportunities is also rising.

Two forces are driving this shift. First, public markets are dominated by a smaller group of mega-cap names, primarily within the technology sector, thereby concentrating portfolio risk. Second, a meaningful portion of the innovation and scaling cycle takes place before companies list, pushing a greater share of the value-creation curve into private markets.

However, operational considerations such as high minimum ticket sizes and extended lockup periods have long made private markets largely the domain of institutional investors. 

That is changing, as structural and product innovations are making private markets more accessible to individual investors. Among these developments, evergreen structures offer a practical way to participate, enabling diversification beyond concentrated public benchmarks and access to a wider range of long-term growth opportunities.

“We see private market participation broadening globally, not just in Asia, as it provides a more diversified investment set,” said Gabriel Ng, managing director, Neuberger Berman Private Equity. “The private equity asset class has also delivered attractive returns over public markets across multiple long-term horizons, and that inherent return advantage is a key attraction for investors.”

Private equity has historically delivered a steady performance premium of approximately 3-4 percentage points per year, approximately 12.9% versus 8.2% over 20 years and 13.0% versus 9.4% over 15 years, underscoring its role as a long-term return enhancer and diversification engine within multi-asset portfolios.

Rise of evergreen funds

Evergreen private equity funds are open-ended vehicles that provide investors with ongoing access to private markets. They differ from traditional private equity funds in how capital is deployed, managed, and returned.

In a traditional model, managers raise a fixed base of commitments during a finite fundraising period and then deploy the capital over multiple years to build diversification. These funds are generally illiquid, with lockups for as long as 10-12 years. Capital is called as investments are being funded, and distributions are returned to investors who must decide whether and when to reinvest via subsequent funds.

Evergreen funds take a different approach. Instead of a fixed term, they offer perpetual access through monthly or quarterly subscriptions with no set end date. Capital is invested immediately into a diversified portfolio, and periodic liquidity is available (subject to the stated redemption gates of the fund). These vehicles aim to maintain a consistent target investment level, and distributions are typically reinvested automatically to sustain compounding and mitigate reinvestment risk.

While these features are compelling, not all evergreen funds deliver them equally well. For investors, the flexible structure sets the stage, but manager execution drives the returns. Success depends on robust processes, deep GP partnerships, and cycle-tested execution. 

With the pre-2022 era of ultra-low rates and steadily rising valuation multiples behind us, the environment is more demanding. Even if some rate cuts occur, higher rates and sticky inflation are likely to persist in the near to mid-term. In this context, securing quality deals, disciplined underwriting, and executing on operational improvement, rather than depending on market beta, will determine return outcomes.

“In spite of a less benign environment, we believe that private equity can still deliver attractive returns to public markets and remain accretive to an investor’s portfolio construction over the long run. However, dispersion will likely widen between top-quartile and lower-quartile funds, making manager selection more critical than ever,” said Ng.

Neuberger’s evergreen expertise: Institutional quality, individual access

For investors seeking institutional rigour with individual access, Neuberger’s evergreen platform offers a proven path. The firm is among the largest managers of evergreen funds, with 15+ years of operating history and more than US$15 billion in evergreen AUM, drawing on private market expertise cultivated over three decades.

Neuberger currently oversees approximately US$150 billion in global private market strategies, across primaries, co-investments, secondaries and private credit. More than 400 private market professionals are based in key financial hubs worldwide (approximately half in investment roles). Senior leadership averages 20+ years of experience, with a ~98% senior-level retention, preserving judgment, process continuity, and cycle-tested discipline.

This scale and continuity translate into differentiated access built on long‑standing general partner (GP) relationships. Decades of primary commitments have forged durable partnerships among small-mid cap GPs and the largest global managers. Because Neuberger does not run a competing direct buyout team, leading GPs view the firm not as a competitor but as a preferred partner. 

“This approach strengthens our deal flow and allows us to be highly selective, with an acute focus on valuation, asset quality, sector defensiveness, the GP’s relevant experience and track record, among many other key investment selection criteria,” said Ng.

Global private equity access strategy

To convert these advantages into a practical, investable solution for individuals and advisors, Neuberger introduced the Global Private Equity Access Strategy in late 2022. The strategy offers monthly subscriptions and redemptions with manageable minimums and automatically reinvests distributions.

“We’ve designed the strategy to be more focused on direct investments, particularly co-investments. There are a few reasons for that. Mainly the ability to tactically pivot into defensive sectors, create highly curated exposure to attractive assets and also achieve fee efficiency for our investors,” said Ng.

The strategy also selectively allocates to GP-led secondaries (both single asset and multi-asset continuation fund transactions). Neuberger’s approach to GP-led secondaries once again focuses on quality, where it seeks to provide a solution to enable GPs to continue to own and compound their best-performing assets, while providing liquidity to its existing investors. 

The current portfolio is scaled up and well-diversified across multiple GPs and spans small/mid to large-cap companies, balancing growth and resilience. While sector-agnostic, it leans toward less capital-intensive areas such as business services, technology, healthcare, financial services, education and non-discretionary consumption.

“Through the Global Private Equity Access strategy, we seek to broaden access without compromising quality. In addition, the Neuberger deal team also invests into the same funds that we raise, aligning our interests closely with our investors,” said Ng.

Learn more about our Evergreen Solutions here: Hong Kong investors | Singapore investors.

 

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For Sophisticated Investors Use Only

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This is a sponsored advertorial from Neuberger Berman.