Blackstone and KKR evergreen funds for wealth investors attract institutional backers
Institutional investors are beginning to allocate capital to private market vehicles from Blackstone and KKR originally designed to give wealthy individuals access to private equity, credit and infrastructure, according to a report by the Financial Times.
Institutional investors are now investing in private market vehicles originally intended for wealthy individuals, according to a Financial Times report. Evergreen funds, which allow investors to access capital at predetermined intervals instead of committing it for the typical decade-long private equity fund lifespan, are gaining traction in the wealth management market.
These structures have become a key focus for asset managers seeking to expand into this market. Despite offering lower fees and potentially lower returns than traditional private market vehicles, evergreen funds are attracting interest from pension funds, endowments, and other large institutional investors. Blackstone's wealth business has seen institutional investors allocate capital to its evergreen products, though they currently represent only a small portion of the capital raised, according to Joan Solotar, the firm's global head of private wealth solutions.
She expects institutional interest to continue growing. In response to rising demand, KKR has introduced institutional share classes across several evergreen strategies, including buyout, credit, and infrastructure funds. Eric Mogelof, KKR's global head of client solutions, stated that this move aims to address growing institutional demand.
This development could significantly impact the private markets industry, as asset managers increasingly target non-traditional institutional investors to broaden their investor base and generate more predictable fee revenues. Leading private markets groups such as Blackstone, KKR, and Apollo have rapidly developed products for individual investors in recent years.
Meanwhile, many institutional investors have become more cautious about committing new capital to traditional private equity due to managers' struggles in exiting investments and distributing proceeds. Evergreen structures could offer institutions an alternative, providing greater flexibility over capital deployment and liquidity.
Written by urgent.news from Private Equity Wire's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
