Evergreen Funds 101: A Flexible Structure
In the alternative investment landscape, evergreen funds are often misunderstood as specialized vehicles aimed at retail investors. This misperception overlooks their core nature as flexible frameworks designed for broad application.
Evergreen Funds by Net Assets
We compiled the top 10 tracked evergreen funds by net asset value, which collectively manage $49.3 billion across funds formed between 2014 and 2022.
Other Fees & Overlooked Layers
While management and performance fees dominate discussions, Evergreen funds frequently include a range of additional charges that can erode returns if not carefully monitored.
Performance Fees and Incentives Tied to Returns
Performance fees are where the alignment of interests between investors and managers either shines or falters. At first glance, the concept seems straightforward: managers earn a share of profits, typically around 20%, as a reward for generating returns.
Management Fees and Keeping the Lights On
Everyone knows the base management fee as the fund's annual "rent" for professional stewardship, typically a percentage of assets. But in Evergreen funds, the excitement – and the complexity – begins with the fine print on how that percentage is applied.
Beyond the Headlines and into the Footnotes
While most investors grasp the basics of management fees (the steady operational charge) and performance fees (the reward for outperformance), the real intrigue lies in the layers beneath – the fine print, the variations, and the subtle mechanisms that can have a substantial impact on returns to the investor.