Evergreen funds are set to experience growth of around 20 per cent a year, set to surpass $1 trillion by 2029.
Analysis from private market firm Harbourvest, which has US$146 billion ($218 billion) in assets under management, found evergreen funds are a response to rising retail and wholesale demand.
These types of funds offer greater liquidity and open-ended access to private equity which are more investor-friendly ways to access the asset.
As a result, assets have reached $427 billion in AUM and Harbourvest is projecting conservative forecasts of 20 per cent annual growth.
This will see it reach US$1 trillion by 2029.
In its 2026 outlook, Harbourvest said: “Private markets firms are responding to rising demand from an increasingly diverse set of investors with varying needs and objectives by creating innovative products.
“Some form of periodic liquidity, the structural tax reporting advantages, plus the simplicity of making single investments (as opposed to being required to meet drawdown commitments) are particularly valued by individual investors and smaller institutional investors.”
Earlier this year, private markets manager Fortitude Investment Partners launched a small-cap private equity evergreen fund while Hamilton Lane launched a global venture capital fund in an evergreen structure.
However, consulting firm bfinance pointed out in July that such funds also carry risks. In particular, bfinance noted the potential for liquidity mismatch and diluted returns, attributing the latter to the substantial cash buffers used in these products.
As well as this, it stated that some newer evergreens have limited or opaque performance track records, with fee layering and structural complexity obscuring true return alignment.
The latest evergreens – offering monthly, weekly or even daily liquidity – were identified as particularly challenging due to the incompatibility of private markets and liquidity.
“In pursuit of broader distribution, liquidity terms risk exceeding what underlying investments can reliably support,” bfinance said at the time.
Meanwhile, Harbourvest said it expected the Australian fundraising environment to remain strong next year, driven by an upswing in middle-market fundraising. Alongside Japan, Australia is forecast to be one of APAC’s more active fundraising markets.
With a mature, GP-friendly ecosystem, supported by dependable regulatory settings, high-quality opportunities, and credible exit pathways, the market is set to remain strong in 2026.
Hemal Mirani, head of APAC and managing director at HarbourVest, said: “Our analysis highlights a continuing theme in the APAC private equity market: that Australia, with its deep pool of mature middle-market firms, remains a key driver of regional investment, exits, and fundraising activity.”
