When factories first got electricity, nothing changed.
They replaced the steam engine with an electric motor and kept the same floor plan, the same workflow, the same production logic. It took 30 years before someone realized the factory itself had to be redesigned around the new power source. Once they did — natural light, single-story layouts, decentralized machines — productivity transformed.
Evergreen funds are in that early phase right now.
If you’ve looked at the wave of new evergreen launches, you’d be forgiven for thinking the hard part is fundraising — getting the wrapper approved, building the distribution, accessing a new capital base. The easy thing to do is take a drawdown strategy and drop it into a new wrapper. New distribution channel, new investor base, same underlying approach.
But the wrapper changes the physics. Working on the design of these vehicles has taught me that the design problems — how you size the liquidity sleeve, how you construct a portfolio with continuous inflows and no harvest period, how you align incentives when carry is calculated on unrealized marks — are harder than any pitch deck suggests.
These aren’t distribution problems. They’re engineering problems. And if you’re evaluating an evergreen fund, that distinction matters more than the track record on slide one.
The next time you see an evergreen fund pitch, ask one question: was this vehicle designed from the floor plan up — or did they just swap the motor?