Evergreen funds explained

The short version

Closed-end funds lock you in. Evergreen funds let you out slowly

A traditional private equity fund is closed-end: you commit once, the money is called over several years, and it comes back as investments are sold, typically over ten years or more. There is normally no right to withdraw early.

An evergreen fund has no fixed end date. It takes in new money and offers to buy back units from time to time, at a price based on net asset value (NAV). Because the underlying assets are illiquid, the exits are limited by design: how often, how much, and on what notice.

The main structures

Gates, pro rata and the price you get

A gate caps how much can leave in one window. If requests exceed the cap, they are usually met pro rata: everyone gets a share, and the rest waits. The SEC also warns interval fund investors that they will not know the exact price they will receive when they accept a repurchase offer.

Gates are not hypothetical. Jefferies’ July 2026 secondary market review describes elevated redemptions across evergreen vehicles in 2026, with several managers activating standard 5 per cent NAV gates to manage outflows. The IMF warned in 2024 that liquidity tools in funds aimed at individual investors had not been tested in a severe run-off.

In the EU, revised fund rules require managers of open-ended alternative funds to select at least two liquidity management tools from a harmonised list, such as redemption gates, notice periods and redemption fees. ESMA’s guidelines on those tools apply from 2026.

Asia: Singapore’s proposals

In a March 2025 consultation on retail access to private market funds, MAS proposed that an unlisted long-term investment fund-of-funds should offer to redeem at least once a year, with 10 per cent of total assets offered annually (or 5 per cent for a semi-annual redemption), payment within 90 days, and pro rata treatment if money is short. These were proposals for consultation, not final rules.

Questions to ask about any semi-liquid fund

1. How often can I ask to redeem, how much notice is needed, and when is the price struck?
2. What is the gate, and what happens to the part of my request that is not met?
3. Can the board or manager suspend redemptions, and on what grounds?
4. What liquid assets or credit lines does the fund hold to meet redemptions?
5. How is NAV set between valuations, and how stale can it be?

Education only. This page explains how fund structures and terms generally work. It is not investment, legal or tax advice and is not a view on any fund, manager or product. Worked examples are hypothetical.