Chapter 7: How Accessing Private Wealth Requires a Back Office transformation

Whether it is a private credit fund or a long-term infrastructure fund, designing and constructing an evergreen product is a significant undertaking; one that every GP has to approach with eyes wide open.

Unlike closed-ended funds, which use periodic drawdowns and long-term liquidity lock-ups over multiple years, the typical operating model for an evergreen fund utilises a monthly subscription and quarterly redemption framework. Most evergreen funds impose redemption limits equivalent to 5% of NAV.

Evergreen funds generally need to report more frequently than closed-end funds due to their open-ended nature and increased liquidity options. Net Asset Value (NAV) calculations are often performed monthly or quarterly, rather than annually or semi-annually for closed-end funds.

One of the most important back office/technology considerations is managing the unique liquidity demands of a semi-liquid product, to ensure that investors’ liquidity needs are met.

Those who are part of a wider asset management group, with established fixed income teams, have one advantage: the private equity team can draw upon the expertise of their fixed income colleagues and help them to design a fixed income sleeve.

While the size and composition of a liquidity sleeve will differ from manager to manager, it is imperative that when launching an evergreen product, the right level of infrastructure is in place to cope with cash management and increased reporting frequency, as well as the ability to deliver digital communications via increased marketing and education.

As highlighted in a white paper by SEI⁷, “Evergreen funds – The next frontier in private markets?’ cash management in evergreen funds requires the manager to balance flows into and out of the fund in due consideration of the fund’s liquidity terms. The paper points out that this becomes one of the biggest challenges managers face with a semi-liquid structure.

System Demands

Private markets firms looking to embrace the fast-developing private wealth opportunity should carefully evaluate their existing operational set-up. Alluring is it may be, tapping in to private investors via evergreen funds places significant pressure on a GP’s infrastructure, from front to back.

Scaling with technology is vital. Over the last five years, technology has been a driver to access, education and better standards of transparency and reporting across the industry. If the private wealth industry is able to achieve a meaningful increase, in terms of the percentage of portfolio exposure to private markets (which is still only around 2%), it will require further adoption.

“Having the technology in the middle definitely helps, especially for managing cashflows,” commented Frederic Giovansili, Deputy CEO, Tikehau Capital. In 2022, the firm announced a partnership with leading fintech platform iCapital to increase wealth managers’ access to Tikehau Capital’s private market investing opportunities. This allowed Tikehau Capital to launch a customised marketplace powered by iCapital’s technology.

“The technology has to be specialised,” continued Giovansili, speaking at IPEM Canes Wealth 2025. “You cannot be a generalist IT provider and all of a sudden discover this retail market. You need specific technology aimed at this sector, especially when it comes to financial advisers.”

Advanced systems are needed to accurately track and differentiate between redeeming and non-redeeming classes. Consequently, customised enhancements to existing systems are often required to handle the complexities of evergreen fund management.  

Sophisticated valuation tools are also necessary to determine fair pricing for current investors exiting or new investors entering the fund. These tools need to be capable of frequent and accurate portfolio valuations that extend beyond the existing valuation framework used for closed-ended vehicles.

Managers may find that they also need to introduce more dynamic risk management tools to handle the fluid nature of evergreen funds. Generative AI tools that can help improve data automation, aggregation, reporting and liquidity risk monitoring are beginning to be adopted to help address system complexity.

System agility is key.

GPs already have the operational setup needed to manage capital calls and distributions for a defined set of investors in the closed-ended institutional fund world.

By contrast, distributing an open-ended vehicle to potentially thousands of investors, even when the capital is fully committed on day one, is a markedly different proposition.

Rather than overseeing large ticket allocations, a GP’s back-office infrastructure needs to be agile enough to handle multiple small ticket allocations on a continual basis.

“If you want to scale your distribution efforts and the level of investors - i.e. the mass affluent segment - you need different instruments like ELTIF evergreen funds. This is the mutualisation of private markets. You get closer and closer to private investors investing in a private markets fund like they would in a mutual fund,” commented Markus Pimpl, Co-Head Private Wealth Europe at Partners Group, speaking on the panel “Closing The Information Gap: Best Practices For Distributor And Investor Readiness.”

Selecting Technology Providers

Agathe Bubbe, Director Wealth Solutions, Investor Relations at Eurazeo believes that Evergreens are the best way forward to address the mass affluent market. “Technology will play a great role in the development of these markets,” she remarked at IPEM Cannes Wealth.

However, when selecting technology providers, GPs should be mindful of the fact that there is no one size fits all solution. Tapping in to global wealth means scaling with different providers. What works in the US wealth market might not work in Europe or Asia with its diverse regulatory and banking regimes.

Shane Clifford, Head of Global Wealth at Carlyle, commented on the panel session "The Private Wealth Potential: “Talkin’ ‘Bout A Revolution” that GPs should ensure they have global connectivity technology providers to support their strategic objectives. “It’s a very fluid situation. iCapital is the dominant player in this space but there are other great firms in the ecosystem as well. It’s understanding that ecosystem and what your partners are trying to achieve,” he remarked.

Framing the Challenge

Unlike closed-ended funds, which use periodic drawdowns and long-term liquidity lock-ups over multiple years, the typical operating model for an evergreen fund utilises a monthly subscription and quarterly redemption framework. Most evergreen funds impose redemption limits equivalent to 5% of NAV.

Evergreen funds generally need to report more frequently than closed-end funds due to their open-ended nature and increased liquidity options. Net Asset Value (NAV) calculations are often performed monthly or quarterly, rather than annually or semi-annually for closed-end funds.

When assessing their back-office capabilities, GPs should ask themselves:

• Does our back office infrastructure meet the demands of private wealth and deliver the right client experience?
• Do we have the internal systems required to handle evergreen NAV reporting, as well as different European tax regimes and local regulatory rules?
• What gaps are there in our existing reporting systems and liquidity management systems that we need to address before considering an open-ended perpetual fund structure?

Other system processes for review might include investor onboarding, KYC/AML compliance, tracking subscriptions and redemptions and maintaining fund balances (as part of the liquidity management).

Having the right operational set-up is something that GPs need to take seriously if they are to win the trust of distribution partners. Jake Williams, Head of International Product Strategy, Wealth Management Alternatives, Franklin Templeton noted at IPEM Cannes Wealth that as the adoption of evergreen products increases through different countries and client types, it is leading to more operational burden.

“These structures are complex - monthly subscriptions, quarterly redemptions, early redemption fees, soft and hard locks. All of these different components and mechanics within the structure means there is a level of burden on distributors and clients, and on us. A big focus of ours is how can we make the client journey as seamless as possible?” said Williams.

1. Cash Management Considerations

One of the most important back office/technology considerations is managing the unique liquidity demands of a semi-liquid product, to ensure that investors’ liquidity needs are met. Those who are part of a wider asset management group, with established fixed income teams, have one advantage: the private equity team can draw upon the expertise of their fixed income colleagues and help them to design a fixed income sleeve.

While the size and composition of a liquidity sleeve will differ from manager to manager, it is imperative that when launching an evergreen product, the right level of infrastructure is in place to cope with cash management and increased reporting frequency, as well as the ability to deliver digital communications via increased marketing and education.

As highlighted in a white paper by SEI⁷, “Evergreen funds – The next frontier in private markets?’ cash management in evergreen funds requires the manager to balance flows into and out of the fund in due consideration of the fund’s liquidity terms. The paper points out that this becomes one of the biggest challenges managers face with a semi-liquid structure.

This point was emphasised by Raluca Jochmann, Managing Director, Head of Private Markets Solutions at Allianz Global Investors. Speaking on the panel “The Liquidity Equation – What’s The Right Level And Approach For Wealth Clients?” At IPEM Cannes Wealth, she said: “The risk to the provider is not handling cash flows properly. It requires lots of tools to ramp up an evergreen portfolio to provide the right returns and invest at the right pace as new cash comes in. You also need to have the proper risk management tools to manage redemptions on the way out. The next three to five years will show how these managers perform against each other.”

At private banks such as BNP Paribas Wealth Management, great care is taken to ensure they partner with GPs who have the scale and ability to raise money from a diverse investor base. That means having strong deal flow to match capital inflows with capital deployment. As Claire Roborel de Climens, Global Head of Private & Alternative Investments at BNP Paribas remarked: “There could be a negative impact on performance if there is too much cash sitting in these products. This know how is something that at the moment very few GPs have.”

2. Secondaries: An effective risk tool?

Most evergreens have only launched in the last few years during what has predominantly been a bull market; not withstanding the trade tariff volatility of 2025. There will be times, going forward, when managing cash flows will become a lot more challenging. This will prove who has the operational expertise to navigate stressed conditions, versus those who view evergreens as merely an asset gathering exercise.

“You have to be capable and knowledgeable on how to handle stressed situations,” noted Pimpl. “Gatings are not necessarily bad. There might be very good reasons to gate a fund. But there are also bad reasons to gate a fund and this is what investors will use to differentiate great managers from those who are running after the hype we are currently seeing.”

Private equity secondaries are an effective way to manage the unique challenge of evergreen liquidity. This is largely due to the fact that they shorten the J-curve, returning distributions at a faster rate than primary fund assets. Combining different vintages and maturities offer GPs the ability to handle quarterly redemptions, which are typically capped at 5% of the fund’s NAV; equivalent to 20% per annum.

Edouard Boscher, Head of Private Equity at Carmignac, the prominent French asset manager told the IPEM community at IPEM Cannes Wealth: “Secondary investments that you can add in to an evergreen are very important (when it comes to cash management). “First, it is a pure private equity play - not multi-asset - and second it is shorter duration. You receive cash quickly, which makes secondaries a perfect fit for evergreen structures. If you have redemptions you can use distributions from your portfolio to rebuild your cash position.”

Luigi Capezzone, CIO and head of investment strategies, Banca Generali warned that if evergreens are not managed properly, liquidation risks could arise “and the market will not react favourably to these structures. There are liquidity management challenges but it is important to restate the fact that these are illiquid assets.

Looking Ahead

GPs will need to continue adopting more technology to enhance their operational infrastructure in order to improve the overall user experience. Many of the complexities that have been hallmarks of closed-ended structures will need to simplified to provide a seamless investor journey; characterised by clear reporting and a straightforward onboarding process.

“The user experience is something that needs to improve if we want to expand the asset class to a broader range of investors. What we are very focused on at Private Corner is how we bring private asset solutions to the market and improve the HNW investor experience,” remarked Thomas Renaudin, Deputy CEO of Private Corner, a French digital platform.  

In conclusion, the back-office capabilities needed to effectively manage an evergreen product combine to what is arguably a more expensive and complex undertaking than managing institutional capital in traditional closed-ended funds.

“GPs have spent a lot of time to cope with the expectations of institutional investors on transparency and reporting, on being able to give them information about upcoming liquidity events,” says Jessica Sellam, Managing Director, Rothschild & Co. Wealth & Asset Management. “However, once you go to the retail market you can’t do this with the same digital platform or reporting platform. You need to consider the tax regime, local regulations and have a client servicing team in place, which adds to the costs.”