Wealth managers warm to evergreen funds as demand for private markets intensifies

US wealth managers are rapidly expanding their presence in private markets, turning to evergreen fund structures as a scalable way to offer clients access to alternatives traditionally dominated by institutions.

A new report from With Intelligence highlights that the value of wealth assets that could shift into private strategies is substantial, with global wealth investors projected to contribute trillions in new commitments over the next five years. “Wealth investors represent the fastest-growing investor segment in private markets,” the report notes, citing 846 alternative investment intentions from 266 wealth allocators over the past year.

The shift stems in part from the dwindling universe of public companies and the rise of private credit, private real estate and infrastructure as core allocations rather than specialty exposures. Meanwhile, general partners navigating slower exits in traditional private equity are increasingly motivated to diversify their investor base.

Fund formats including interval funds, tender offer funds and non-traded BDCs have exploded in number as managers seek to simplify access for private-wealth clients under 1940 Act regulatory protections. Platforms supporting tax reporting, portfolio integration and education are helping advisers navigate a still-complex array of vehicles.

“Every asset manager has made the wealth and high-net-worth space of strategic importance,” says Bob Shea, CIO, Dynasty Financial Partners, quoted in the report.

Advisors are increasingly using evergreen funds as a foundation for private allocations, supplementing with drawdown vehicles for targeted exposures. “Advisors often use evergreen funds to establish a core private markets allocation more quickly, then complement that with drawdown funds…” adds Neil Blundell, CIO, CAIS Advisors.

Private credit, PE, and REITs

Private credit continues to dominate semi-liquid fundraising with non-traded BDC assets climbing above $200 billion this year and set to surpass $1 trillion by 2030 if current growth rates persist. Interval funds are also scaling quickly, doubling to $74 billion over two years as investors broaden beyond direct lending into specialty finance, distressed and opportunistic strategies.

Private equity is slowly catching up and tender-offer funds are gaining momentum, with the largest 15 vehicles amassing nearly $60 billion over the last five years. New products from Apollo, Blackstone and KKR have accelerated the trend as wealth firms seek secondaries to mitigate the J-curve and improve diversification.

After a spike in redemption queues, non-traded REITs appear to be stabilizing. Blackstone’s $53 billion BREIT posted its best fundraising quarter since 2023 as redemptions eased 97% from last year’s peak. Wealth allocators are leaning into value-add and opportunistic strategies to capture favorable pricing while tamping down exposure to core and core-plus positions they already hold.

Infrastructure building block

Infrastructure is emerging as a new portfolio building block for private wealth with 13 infrastructure funds have launched since 2024, led by Brookfield’s $4.1 billion evergreen strategy, as many advisors look for income and inflation protection in a segment once geared almost solely to pensions and sovereign funds.

Consultants are also reshaping distribution, no longer just gatekeepers, many now operate branded private funds while merging into wealth platforms to tie institutional investment capabilities to private-wealth distribution.

Hightower Advisors’ merger with NEPC is one among several examples. At the same time, wealthtech providers like iCapital and CAIS are expanding access and operational support, fostering the rise of public/private model portfolios from major players such as BlackRock and Vanguard. “Model portfolios are a possibility because of the growth of evergreen funds,” notes Kunal Shah of iCapital.

Even as interest surges, advisors warn that product complexity still poses hurdles. “There’s a lot of advisor education and client education that needs to be done,” says Brian Heimowitz, VP, Alternative Investments at Concurrent Investment Advisors. Ensuring liquidity promises are realistic, managing expectations on valuations, and prioritizing wealth clients even when institutional demand rebounds remain top concerns.

As private markets evolve from niche exposure to staple allocation, industry leaders say the next phase of growth will hinge less on product proliferation and more on the ability to build trust at scale across the financial advisor landscape.