IPEM Wealth Session - moderated by Simon Jennings of HarbourVest.
Over the last 25 years, private wealth has exclusively accessed private markets with advisory-led mandates, with UHNW and HNW clients using closed-end feeder funds as the main vehicle.
Much has changed, however, in the last five years, with technology and product innovation helping to widen the aperture. Open-ended evergreen funds are flourishing in number, providing a lower cost of entry, more regular liquidity and the ability for investors to be fully invested from day one, removing the complexity of managing capital calls over time.
While evergreens initially grew via advisory, the real prize, going forward, sits inside discretionary mandates. Tapping in to this scalable capital base represents a huge opportunity for both GPs and private wealth platforms as individual investors seek to increase their portfolio exposure to non-listed asset classes.
A few years back, BNP Paribas Wealth Management began to offer evergreens through advisory mandates. Then, last year, it took the first step to integrate them into discretionary mandates in selected countries.
However, incorporating evergreens in to discretionary mandates remains a tough nut to crack.
There are many barriers for private banks to overcome. These include:
1. Portfolio construction & investment culture misalignment
2. Operational & liquidity management complexity
3. Benchmarking & performance measurement challenges
4. Risk modelling & reporting integration gaps
5. Regulatory & mandate repapering constraints
In an engaging discussion at IPEM Wealth 2026 moderated by HarbourVest Managing Director, Simon Jennings, this point was clearly articulated by Claire Roborel de Climens, Global Head of Private & Alternative Investments, BNP Paribas Wealth Management:
“We have to face new operational issues related to the holding period, the subscription and redemption windows, how to measure the performance of the mandate because this is a benchmark-driven business. When you include private assets, which benchmark do you use to measure the performance of this illiquid pocket?” 
She added:
“You also have the issue of harmonising the reporting of discretionary mandates because [in public markets] you have stress test VaR risk analysis, and we are not so used to such KPIs for illiquid assets. Another important issue is regulatory. Country by country you have different regulations for discretionary mandates. For example, today if we want to include evergreen products in existing mandates, clients have to repaper. This is a long, complex journey but the trend is clearly there and it will evolve."
Breaking through the barriers
The investment process is critical to how well evergreens can be incorporated into model portfolios that blend both liquid and illiquid asset classes. The stakes are significantly higher when looking to build discretionary mandates, at scale, across thousands of client accounts, compared to individually tailored advisory mandates.
“It starts with that propositional portfolio management-type piece,” said Jan-Marc Fergg, Managing Director, Head of Investment Products & Solutions for NatWest Group. “Then it’s the operational piece. Discretionary portfolio management means you have constant inflows, outflows. You need to treat clients fairly in that process.”
Taking a careful, considered approach based on the foundations of suitability and appropriateness is also necessary as wealth platforms begin to include private markets.
Rather than introduce evergreens wholesale, Fergg explained that the bank’s approach has been to create “an alternative family of DPM mandates”, where the client is made fully aware that such solutions contain both public and private markets.
Adoption rate - onwards and upwards?
With the introduction of the Long-Term Asset Fund (LTAF) in the UK, wealth platforms like James Hambro & Partners are lowering the investment criteria for clients to access private markets and expect the LTAF to be more widely adopted within discretionary mandates. However, as Patrick Trueman, Portfolio Manager, was keen to stress:
“A lot of our investment managers have spent their careers mainly in the liquid markets. This is a very new offering and it requires education.”
Indeed, education is paramount if more discretionary capital flows in to evergreen funds.
This could result in the scales tilting even more towards open-ended structures, versus closed-ended, in the coming years.
In Jennings’ view, the split between open versus closed-ended funds across all segments of private wealth is approximately 75%, 25%. When asked what they think this split will be in five years, Fergg suggested it would rise to 90%. By contrast, Roborel de Climens predicted it would be closer to 70%.
“It will depend on the development of ELTIF evergreens but I believe that closed-ended funds will remain. We will see maybe more thematic or niche strategies, but I believe they will continue to co-exist,” said Roborel de Climens.
While closed-ended will likely remain a useful, important portfolio option for UHNW clients, open-ended funds will provide the fuel for model portfolios as retail wealth exposure to private markets rises.
In Trueman’s view, “it feels like it’s one way traffic towards evergreens”.
Choosing the right GP
Regardless of whether the fund is open or closed, the same rigorous due diligence process applies is required for fund selection. In fact, for evergreens, the bar is arguably higher. Before they can consider a GP, banks must be convinced of:
• The GP’s ability to manage regular liquidity windows
• The GP’s capacity to select and originate deals - these must be sufficient in volume to match clients inflows
• The GP’s capacity for ongoing marketing efforts and provision of after-sale support
• The GP’s long-term track record and ability to create value
For platforms like James Hambro & Partners, still at an early stage of their private markets journey, the focus is on developing a limited number of strategic partnerships that can support their ability to build a private equity sleeve.
“We want to find solutions that can give us reasonable breadth. So at this stage, it’s very much a small number of strategic solutions,” said Trueman. “We'll be managing the discretionary mandates ourselves. There’s a lot of operational planning, which is why, to begin with, the number of funds that we have on our shelves will be relatively limited.”
No supermarket sweep
Private banks have to consider how best to navigate the expanding array of choices, in terms of which GPs to partner with. The aim is to create a roster of high conviction relationships that delivers enough diversification but not too much, and sufficient strategy breadth without diluting oversight. The GP’s calibre and brand recognition must be factored in to this equation to “build model portfolios where we have a good representation across the various opportunities in private credit and private equity,” remarked Fergg.
Given the perpetual nature of evergreens, determining the optimal number is challenging.
“If you want to build discretionary mandate you need to have a minimum universe of funds. I believe our range of evergreens will be 20 to 25 funds, which means four to six funds per asset class. In each asset class you need to differentiate the best GPs, as we do for closed-ended funds. I don't believe we will become a supermarket for evergreens,” explained Roborel de Climens.
Controlling the number of evergreens to build model portfolios ties in to the earlier point about portfolio construction. Having the right operational infrastructure to monitor and manage illiquid products alongside liquid products with sufficient oversight, in order to mitigate the risk of performance dispersion over time, will be key.
“We want to make sure we pick the good ones who will be there for the long term. This is not a quarterly refresh,” Fergg said.
Rising tail risks
As the market grows exponentially and the number of evergreens expands in tandem with rising discretionary capital, the risk is that a liquidity crunch brings everything crashing down.
Some fear that mis-selling evergreens to parts of the market where the end client didn’t understand what they were getting, could lead to reputational damage and sow seeds of mistrust among wealth investors.
“Managing the two side by side does present issues: how do you manage performance? How do you understand the attribution? How do you understand the dynamics of what is influencing your portfolio? There's a lot going on in a multi-asset portfolio as it is but when you're adding these new structures that presents some challenges. It’s something we’ll be focusing on over the next year or two,” confirmed Trueman.
Another potential tail risk is that evergreen returns underwhelm and fall short of client expectations.
Many of these products are yet to reach a three-year track record.
Performance issues could arise because of the GP’s inability to effectively manage subscriptions and redemptions or maintain a strong deal engine.
“The gating issue is a huge challenge,” said Fergg.
However, he remains optimistic:
“Evergreens are a huge catalyst for enabling our clients to participate in a broader investment universe, which we believe provides them with new sources of returns and creates value, portfolio resilience and diversification. On balance, that's a good thing.”
Clarity of value proposition, careful portfolio construction and robust selection will be necessary if evergreens are to become a more permanent feature of discretionary mandates. Although still early days, the signs are encouraging.
