While large investors have learned to handle the challenges of closed-end funds, those with smaller amounts to invest often find it difficult. So, managers have introduced the open-end (or ‘evergreen’) private market fund to address these challenges. Cyril Demaria-Bengochea, Head of Private Markets Strategy, explains what these funds are and how investors can incorporate them into their portfolios.

Investing in closed-end funds – challenges & advantages
Investing in private markets requires significant expertise, time, and resources. Investors usually delegate this task to professional managers and pool their capital into closed-end funds. These time-limited structures provide managers with the flexibility to execute their mandate: capital is called and deployed as opportunities arise, and assets can be held as long as necessary. Investors must be patient, as redemptions are not possible.

Closed-end funds have been used successfully for decades in private markets, but they are tailored to sophisticated investors who can overcome significant hurdles.