Not all evergreen funds are created equal

InvestorDaily

Amid the surge in evergreen fundraising in Australia, HarbourVest Partners has outlined five factors local investors should consider before choosing an evergreen investment. The advent of evergreen funds has paved the way for more investors than ever to gain access to private markets, offering flexible, continuous exposure to asset classes such as private equity, private credit and infrastructure. Many investment firms have launched evergreen funds in Australia in recent years, raising hundreds of millions of dollars, yet investors should be aware that not all evergreen funds are created equal.

Amid the surge in evergreen fundraising in Australia following strong local demand, HarbourVest previously raised concerns about the ‘Seven Sins’ of evergreen investing; namely greed (excessive fundraising), sloth (inefficient deployment and cash drag), envy (chasing secondary discounts), wrath (improper use of leverage), lust (valuation distortion), gluttony (inadequate diversification), and pride (overconfidence in fund management). For investors considering evergreen funds, these risks warrant careful consideration. Recent disruptions in private credit, and the AI-driven repricing in software funds, have jolted markets and brought the vulnerabilities of evergreen funds into sharper focus. In late 2025 and early 2026, many private credit managers faced redemptions for the first time, as flocks of investors sought to limit exposure.

The rest of this article can be found at investordaily.com.au.