Pushing private markets into discretionary mandates is considered the Holy Grail for GPs and while there are signs that things are moving in the right direction, it remains a work in progress.
The advisory sands are shifting...slowly
Historically, private markets exposure in wealth portfolios was largely closed-ended, opportunistic, and positioned as a specialist add-on. Today, however, the wealth management industry is undergoing a fundamental shift from advisory-driven, deal-by-deal access to centrally governed, discretionary allocation. For GPs, this represents a “Holy Grail” of being embedded within total portfolio construction rather than treated as a separate sleeve.
Yet penetration remains low. Even at institutions with significant private markets heritage, discretionary allocations typically represent a small fraction of overall private markets exposure. For mass-affluent and lower HNW segments, allocations of 2–5% are considered ambitious, underscoring how early the journey remains outside ultra-high-net-worth client bases.
Part of the reason for finding ways to steer more discretionary pools of capital into private markets is that the wealth industry widely recognises a structural mismatch: clients frequently overestimate their liquidity requirements while underestimating longevity risk.
Discretionary portfolios dominated by daily liquidity instruments often fail to reflect this reality. Adding illiquid asset classes within these mandates allows wealth managers to express long-term convictions at scale, improve portfolio diversification, and align implementation with clients’ stated objectives.
Evergreen structures are seen as a critical enabler for discretionary adoption. While they are able to effectively lower barriers to entry to access illiquid assets, panellists were explicit that they should not be misunderstood as trading vehicles.
As Shoqat Bunglawala, Head of Multi-Asset Solutions EMEA and Asia, Goldman Sachs Asset Management, pointed out: “We still refer to these vehicles as open-ended rather than semi-liquid for an important reason, which is it's still intended to be a long-term investment vehicle. Fundamentally, you're investing in long-term deals, not to invest in and out of and treat as public market exposure.”
The benefit of private markets evergreens is that they facilitate more consistent deployment, smoother cash-flow management, and operational compatibility with model portfolios. However, to work on a discretionary basis, these structures must integrate seamlessly into centralised governance frameworks and risk systems.
It was noted by panellists speaking at IPEM Wealth on Day 2 that products that increase complexity or require bespoke handling face structural resistance.
David Storm, CIO, Wealth Management Europe at RBC Capital Markets said: “What we're looking for is the ability to consistently deploy consistently at scale. Evergreens have been a bit of an unlock for that.”
While evergreens have unlocked progress, they are not a panacea. Panellists emphasised that evergreen products should meet institutional standards with a clear focus on performance rather than asset gathering.
It was also noted that the quality of the GPs team is vital:
“We're moving in the right direction. We're seeing more and more platforms specialised in evergreens that facilitate access. But what's missing in my opinion is the quality of GP team members that service these products,” commented Wadih Manneh, Head of Private Markets, Arab Bank (Switzerland).
Education was repeatedly identified as a critical success factor, both for clients and internal advisory teams, on the path towards discretionary mandate adoption. Misunderstandings around liquidity, risk, and product mechanics remain widespread, even among sophisticated clients.
Clear communication on deployment dynamics, distribution profiles, behaviour in stressed markets, and liquidity constraints is essential to maintaining trust.
GPs seeking inclusion in discretionary mandates should consider the following:
• Design products for portfolio integration, not distribution
• Reduce operational complexity and improve reporting quality
• Be transparent on liquidity management and cash handling
• Prioritise performance, alignment, and scalability over rapid fundraising
• Support education, but with clarity and consistency rather than volume
• Discretionary adoption is not a sales channel; it is an institutional-grade governance decision.
The emergent 50/30/20 portfolio
Both private banks and fund managers recognise the inevitability towards 50/30/20 portfolio construction, as private markets increasingly dominate the global economy. Clients increasingly expect and if firms aren’t able to demonstrate that ability, they’ll simply go elsewhere.
Consequently, there is a growing imperative for wealth managers to engage with private markets, as clients increasingly seek these opportunities, making it a critical component for competitive portfolio construction.
Private banks like Mediobanca, for example, have evolved from commencing with club deals and co-investments for their clients to building out a stable of evergreens that include two diversified funds and numerous evergreens across different asset class verticals.
It was noted, however, that the concept of 50/30/20 was a bit too simplified:
“Everything we do is going to be customised to individual circumstances. There isn't a formula, there isn't a Yale model. We think about a client's risk and return profile, asset class preferences, comfort level with illiquidity, need for income,” remarked Nancy Curtin, Global CIO, Alti Tiedemann Global.
Alti Tiedmann's three-pronged model - Stability, Diversified, and Growth - provides a systematic way to categorise assets based on their role in meeting client objectives, offering a more nuanced alternative to a fixed 50/30/20 split.
The Stability component is designed to fund lifestyle needs with a focus on liquidity and risk aversion; the Diversified bucket aims for an 8-10% return by blending various asset classes such as infrastructure, private credit, real estate, hedge funds, and gold; while the Growth segment targets long-term wealth appreciation through both public (passive large-cap, specialist active managers) and private markets (private equity, buyout, growth, venture).
Mediobanca employs a core/satellite approach, utilising diversified evergreen funds for the core and closed-ended, niche funds, or club deals, for the satellite portion of clients’ private markets portfolios.
“We have to go from tactical exposure to core private markets exposure in our portfolios,” remarked Greta Teot, Head of Private Markets, Mediobanca.
This blend of strategies highlights the industry's commitment to building robust portfolios that can navigate turbulent markets while participating in upside potential.
For wealth managers still early in their journey, it was suggested that evergreens represent the easiest first step in introducing private markets to the wider portfolio. Indeed, the evergreen innovation was widely championed by panellists at IPEM Wealth as they enable firms to provide a “liquidity ladder” to wealth clients.
Getting your evergreen fund to market…success factors
GPs wishing to achieve the Holy Grail of selection in to discretionary mandates need to ensure they have carefully thought through their go-to-market plan for an evergreen. And as was stressed by numerous speakers at IPEM Wealth, this is far from easy; indeed, GPs should prepare for even deeper, rigorous due diligence in private wealth over and above anything they experience in the institutional world.
Any expansion into evergreen represents a significant strategic evolution for private market asset managers.
David Walsh, who heads up private wealth at Bridgepoint–ECP, remarked: “You need a huge amount of energy and optimism. You’re asking the firm to change what they do, and move from an operating model servicing hundreds of investors to thousands of investors via intermediary platforms.”
Market entry must be predicated on a “portfolio-first approach”.
Panellists noted that to avoid conflicts of interest between investors in drawdown funds versus open-ended funds, firms must ensure their core investment philosophy remains consistent across both vehicles, as wealth investors seek out the same institutional-grade returns and "patient capital" benefits of private equity. They don’t want the GP to change its investment strategy. The only difference is the delivery mechanism. 
“First and foremost, make sure you're getting great deals in the fund. Ensure that your open-ended and closed-ended funds have a similar investment philosophy, investing in the same types of exposure. Next is the allocation policy; ensure the same deals are going in to both the closed- and open-ended fund, which we split on a pro-rata basis. Also, establish a conflicts committee,” explained Michael Gubbels, Partner, Dawson Partners.
Another key go-to-market success factor is precise target market definition.
Managers must delineate investor segments and geographic focus early to avoid the structural quagmire and excessive legal costs of over-engineering products for every regulatory framework.
Operational transformation is equally critical.
Establishing dedicated resource teams for distribution, investor relations, and liquidity management are regarded as essential. Clarity of communication on potential gating mechanisms is also crucial for protecting fund integrity during market stress and ensuring an orderly redemption process that preserves long-term viability.
Ultimately, launching evergreen funds is a fundamental organisational transformation, not just a product launch. It requires GPs to shift from a deal-focused, institutional mindset to a client-focused perpetual model.
Those who focus sufficient time and consideration over their product design and GTM strategy could find that the Holy Grail of private wealth mass adoption is no longer a dream but a very real, very permanent reality!
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