VC & PE Glossary
What Is Evergreen Fund?
Updated
Definition
An evergreen fund is a private investment vehicle that continuously accepts capital and redeploys proceeds without a fixed end date, unlike a traditional closed-end fund with a ten-year life.
Useful for: LPs, GPs
An evergreen fund is an investment vehicle designed to operate indefinitely—accepting new capital, recycling distributions, and deploying without the hard termination date of a classic private fund.
How it works
Traditional venture and buyout funds raise a fixed pool, invest over several years, and return capital to LPs by year ten plus extensions. Evergreen structures flip that model: the fund remains open, often allowing periodic subscriptions and redemptions subject to gates, notice periods, and NAV-based pricing.
GPs mark portfolio holdings to fair value each period so incoming and outgoing investors transact at current net asset value. Fees may include a management charge on committed or invested capital plus performance fees tied to hurdle returns. Some evergreen vehicles sit inside wealth platforms or institutional portfolios; others are GP-led continuations of successful closed-end funds.
The structure suits strategies with long hold periods—growth equity, private credit, real assets—or managers who want permanent capital without going fully public.
Why it matters
- LPs: You get durable access to a manager but must read redemption terms carefully—gates and side pockets can limit liquidity in stress periods.
- GPs: Less time spent raising new vintages; more focus on steady deployment and investor relations around NAV and liquidity windows.
Common mistake
Treating evergreen liquidity like a public ETF. Redemption queues, manager discretion, and valuation lags mean you cannot assume same-day exit at a quoted price.
Related ideas
See permanent capital, first close, final close, and subscription lines.
Related terms
- Final Close — Final close is the last date a fund accepts new limited partner commitments, fixing fund size and ending the fundraising period before full deployment focus.
- First Close — First close is the initial date a fund accepts LP commitments and begins operating—often while fundraising continues toward a larger final close.
- Permanent Capital — Permanent capital is investment money without a fixed fund life or mandatory return deadline—investors or vehicles that can hold assets indefinitely rather than liquidating a fund by a target date.
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Common questions
Short answers for founders, LPs, and operators