Unlocking Evergreen Opportunities in Private Equity

To assist asset managers in identifying evergreen opportunities in the private equity sector, Ultimus collaborated with Interval Fund Tracker to study the landscape, analyze the data, and offer valuable insights.

Interval Fund Tracker, a provider of competitive intelligence and data for solutions in the closed end fund sector, conducted the research behind the data for this informational guide. While private equity investments have traditionally been reserved for large institutional investors, we believe there is a compelling case for managers to expand access to the private wealth channel where advisers can guide their accredited investors and qualified clients into these investments.

As we will illustrate in the following pages, in recent years, more managers have found ways to bring products into the retail channel via unlisted closed-end funds (CEFs), including both interval funds and tender offer funds where a suite of newly
registered products have entered the market.

Click here to access the full report.

Registered Fund Structures for Private Equity Funds

Obtaining PE/VC exposure through an unlisted CEF structure may have several advantages for retail investors when compared with private funds. For example, most private PE/VC funds require an initial capital commitment followed by capital calls over several years. This can make it difficult for individual investors concerned with managing cash flow. A handful of tender offer funds leverage a capital call structure, but most provide access with a single investment. Additionally, PE/VC funds that are structured as private partnerships require complex K-1 tax forms. In contrast, most unlisted CEFs provide relatively simple 1099s.

PE/VC fund managers may increase their potential investor base by launching interval or tender offer funds. In fact, PE/VC net assets grew nearly 46% per year from 2020 through 2023, making it one of the fastest-growing categories in the unlisted CEF market. It can be a complex endeavor to manage PE/VC strategies in an Investment Company Act of 1940 (1940 Act) wrapper considering various compliance regulatory requirements, so to date, the category has had less fee pressure than other segments.

For a fund to have the opportunity to be successful, a manager needs to match the structure to the strategy. With PE/VC strategies, getting the details right can be especially important.

This is an excerpt adapted from Unlocking Evergreen Opportunities in Private Equity. Click here to access the full report.

With an Interval Fund Tracker Premium Membership you can gain full access to all the underlying data from this report. Questions? Email jacob -at- intervalfundtracker.com