Institutional investors are beginning to allocate capital to "evergreen" private market funds that Blackstone Inc. (NYSE:BX) and KKR & Co. Inc. (NYSE:KKR) originally built for wealthy individuals, the Financial Times reported.
Evergreen funds let investors access capital at set intervals rather than locking it up for a decade-long private equity fund life. Blackstone's wealth business has seen institutions begin allocating to its evergreen products, though they currently make up "only a small proportion of the capital raised," said Joan Solotar, who leads that business. KKR has separately raised the share of deals its evergreen K-Series funds can take from a longstanding 7.5% cap to as much as 20% in some cases, the FT reported.
Institutional investors are validating years of investment by Blackstone Inc. (NYSE:BX) and KKR & Co. Inc. (NYSE:KKR) in wealth-focused products. Both firms, along with Apollo, have expanded evergreen vehicles for individual investors, and institutions now choosing these funds provide another source of sophisticated capital for the products. That adoption could help Blackstone and KKR expand their wealth-management businesses beyond traditional individual investors.
KKR's renegotiated deal-allocation terms provide another sign of growing demand for its evergreen funds. KKR & Co. Inc. (NYSE:KKR) increased the co-investment cap for its K-Series funds from 7.5% to as much as 20% in vehicles such as its $8 billion European Fund VI. The larger allocation gives KKR's wealth-focused funds access to more investment opportunities and could help the company grow ****** ets and fee revenue from this channel.
Evergreen structures solve a current problem for institutional investors, not just individuals. Many institutions have grown more cautious about committing to traditional private equity as managers have struggled to exit investments and return capital. Evergreen funds' greater liquidity gives institutions an alternative way to stay invested without that same lockup risk.
#investors #capital #institutions #private
Evergreen funds let investors access capital at set intervals rather than locking it up for a decade-long private equity fund life. Blackstone's wealth business has seen institutions begin allocating to its evergreen products, though they currently make up "only a small proportion of the capital raised," said Joan Solotar, who leads that business. KKR has separately raised the share of deals its evergreen K-Series funds can take from a longstanding 7.5% cap to as much as 20% in some cases, the FT reported.
Institutional investors are validating years of investment by Blackstone Inc. (NYSE:BX) and KKR & Co. Inc. (NYSE:KKR) in wealth-focused products. Both firms, along with Apollo, have expanded evergreen vehicles for individual investors, and institutions now choosing these funds provide another source of sophisticated capital for the products. That adoption could help Blackstone and KKR expand their wealth-management businesses beyond traditional individual investors.
KKR's renegotiated deal-allocation terms provide another sign of growing demand for its evergreen funds. KKR & Co. Inc. (NYSE:KKR) increased the co-investment cap for its K-Series funds from 7.5% to as much as 20% in vehicles such as its $8 billion European Fund VI. The larger allocation gives KKR's wealth-focused funds access to more investment opportunities and could help the company grow ****** ets and fee revenue from this channel.
Evergreen structures solve a current problem for institutional investors, not just individuals. Many institutions have grown more cautious about committing to traditional private equity as managers have struggled to exit investments and return capital. Evergreen funds' greater liquidity gives institutions an alternative way to stay invested without that same lockup risk.
#investors #capital #institutions #private
2 months ago
