Roundtable: What is the Ideal Portfolio Construction for Evergreen Funds?

In May 2026, IPEM and Carmignac convened a roundtable to explore how family offices should evaluate and invest in evergreen fund structures. The discussion was led by Thomas Moyse and Alexis de Chezelles from Carmignac's private equity business, and brought together a small group of family offices and private market investors from across Europe and North America. This is a summary of the discussion. 

De Chezelles opened with some trend data of how private equity has evolved. Global AUM has grown from roughly $2.5 trillion to close to $10 trillion, shifting private equity from a niche allocation to a core building block in institutional portfolios. Despite this growth, the traditional fund structure was designed for large institutions with dedicated teams and operational infrastructure, and carries features that create friction for many investors.

The three most commonly cited barriers are the illiquidity associated with 10 to 12 year lockups, the need to build a programme across multiple vintage commitments, and the complexity of managing unpredictable capital calls and distributions.

De Chezelles noted that Carmignac itself experienced these frictions directly. The firm was founded in 1989 by Edouard Carmignac, and as the family began diversifying into private equity through closed-end funds, they found the structure at odds with the operational simplicity they were accustomed to as a liquid asset manager. That tension became the motivation for building an evergreen product from within an asset management context rather than a traditional private equity house.

Moyse added that institutional adoption has accelerated. A recent Goldman Sachs survey found that 60% of insurers are now considering an evergreen allocation, and more than 50% are considering investing through their general accounts, suggesting the vehicle is increasingly used as a core balance sheet tool rather than simply a distribution wrapper.

How Carmignac constructs the portfolio to balance performance and liquidity

Semi-liquid funds are not open-ended vehicles and liquidity should be understood as an option rather than a guaranteed feature. The mechanism that delivers this optionality depends on the structure chosen. Some managers, such as Business Development Companies (BDCs) and listed trusts, allow the price to adjust through a bid-ask spread, providing full liquidity at a variable exit price. Carmignac takes the alternative approach, trading at net asset value with quarterly redemption windows, which means that in periods of market stress, gates may need to be applied. These gates are a safety valve to ensure orderly transactions.

The choice of underlying strategy, Moyse argued, is the most important decision in building an evergreen fund. Carmignac focuses on LP-led secondary transactions, which offer several structural advantages for this format.

Secondaries portfolios are already invested, meaning capital is put to work immediately and exits come sooner than in primary or direct strategies. They are also highly diversified, with the fund currently holding exposure to approximately 1,400 underlying companies, ensuring that distributions continue to flow regardless of where the market cycle sits.

Portfolio construction involves a permanent trade-off between performance and liquidity. At one end, mature secondary positions near exit provide near-term distributions but limited remaining value creation. At the other end, younger vintages and co-investments offer greater upside but tie up capital for longer. The fund is deliberately blended across vintages, with positions spanning pre-2017 through to 2020, providing a continuous flow of exits while preserving room for growth.

The liquid sleeve, which sits at 10 to 15% of total assets, is managed actively using Carmignac's fixed income and credit range. Moyse noted that unlike some competitors, who hold cash or money market instruments in this sleeve, Carmignac applies its full fixed income expertise to the allocation, adding measured credit risk where appropriate to limit drag on overall returns. Investors benefit from this at no additional fee or carry. Over the past two years the portfolio has generated distributions equivalent to roughly 25% of invested capital, which, combined with the liquid sleeve, has provided approximately 30% total liquidity headroom at any given time.

Managing the operational complexity

One family office asked how Carmignac handles the back-office demands of a product with continuous subscriptions, redemptions, and underlying cash flows, compared with the more predictable cadence of a traditional primary fund.

There were two decisions that kept the operational footprint lean. The first was to invest alongside Clipway, Carmignac's secondaries partner, through a co-investment structure. Because cash flows are already aggregated at the Clipway level, the fund does not need to manage the individual capital calls and distributions that flow through each underlying fund. The second was to bring the operational standards of a liquid fund to bear on the subscription and redemption process. Investors subscribe in one business day and receive proceeds within seven business days of order settlement, with a single subscription document rather than the extensive paperwork typical of private market vehicles. 

Alexis de Chezelles: "The idea was clearly to get something very lean and crystal clear. Asset side investing, liabilities people getting in or out of the fund, and in the middle us as a gatekeeper ensuring the portfolio construction and every aspect is optimised."

Investor reception and scepticism around evergreen structures

Another participant asked whether Carmignac encountered natural scepticism when presenting the product to prospective investors.

It was noted that a common frustration among new investors was the management fee charged on uncalled capital in traditional closed-end structures. De Chezelles noted that Edouard Carmignac had experienced this irritation directly and continued to receive capital call notices from legacy fund investments where the call was solely to cover fees. That experience shaped the emphasis Carmignac places on having capital fully deployed from day one in the evergreen structure.

On the broader question of reception, Moyse observed that sceptical investors are, in his view, the most rigorous ones. The product does carry genuine constraints, and he said Carmignac deliberately does not present it as a straightforwardly liquid vehicle. Investors who understand that redemption may take between three months and a year in adverse conditions, and who size the allocation accordingly, are the right holders for the product. In that context, he argued, the flexibility on entry and exit timing and the ability to harvest gains for tax planning purposes represent a genuine improvement over a closed-end structure with a nominal 10-year term that regularly extends to 13.

Another participant asked whether European family offices tend to favour large, institutional managers for evergreen products or whether smaller, alignment-driven managers with co-investment access are gaining traction. De Chezelles said that conversations with family offices are qualitatively different from those with large bank distribution networks, which tend to favour recognised brand names as a matter of institutional risk management. Family offices, he noted, are more open to evaluating the specifics of a structure and are more receptive to the family-to-family dynamic that Carmignac brings as both an asset manager and a principal investor.

Will evergreen structures replace traditional closed-end funds?

One participant asked whether the growth of semi-liquid structures would eventually displace the traditional closed-end model.

De Chezelles was clear that it would not. Closed-end funds have underpinned the private equity industry for decades and will continue to do so. The appropriate use case for an evergreen structure is as a complement to a broader allocation, or as a more flexible entry point for investors for whom the operational constraints of a traditional programme are prohibitive. What has changed, he said, is the willingness of institutions to engage. Two years ago several large institutions told Carmignac directly that they did not invest in evergreen structures. Now nearly all of them will at least take a meeting.

Moyse added that the rise of evergreen products is beginning to exert competitive pressure on fees, reporting standards, and transparency across the industry. Closed-end structures have changed relatively little operationally, and the arrival of a well-designed alternative is prompting a longer-overdue conversation about the investor experience in private markets.