Evergreen & Secondaries: When flexibility meets liquidity
Private equity has long been characterised by locked-up capital and a patience-testing wait for returns. Whilst these features support value creation, they often clash with investors’ demand for flexibility and efficient capital deployment. Two powerful trends have emerged from this demand: the evergreen (or open-ended) fund structures and secondaries.
Both trends address specific investor challenges. While evergreen structures broaden access to private equity and offer immediate exposure to a diversified portfolio, rapidly expanding secondaries represent an ideal asset class offering near-term liquidity potential while mitigating the J-curve effect (in particular, LP-led secondaries). Together, these converging trends are highly complementary: they form a solid tandem that is reshaping the way investors engage with private equity.
Why secondaries suit an evergreen structure
LIQUIDITY MANAGEMENT:
Evergreen funds must be carefully managed to accommodate periodic redemptions despite holding inherently illiquid assets. To respect potential redemptions, managers are forced to maintain a certain level of cash or highly liquid assets, which, if not properly managed, could create a structural drag on returns.
By integrating secondaries, evergreen vehicles can rely on mature assets with shorter residual lives and more predictable near-term distributions. These assets have the potential to offer near-term liquidity because they are further along in their value creation phase and closer to the end of their managers’ tenure, and hence exits or realisations.
COMPOUNDING EFFECT:
Evergreen structures are designed to naturally facilitate reinvestment. When an investment is sold, the proceeds are not returned to investors but are immediately redeployed into new opportunities, allowing potential profits to generate further profits - the very essence of compounding.
Secondary strategies amplify this dynamic: since assets acquired later in their life cycle tend to distribute cash more quickly, managers can reinvest these proceeds into new secondary opportunities. Theoretically, this shortens the reinvestment cycle, keeping capital actively deployed at high returns, which could accelerate compounding and create a virtuous cycle of continuous growth.
BOOSTING DIVERSIFICATION AND IMMEDIATE ACCESS:
Diversification is another key advantage of combining evergreen and secondary strategies, especially for LP-led focused strategies. Evergreen funds already provide investors with immediate exposure to diversified portfolios, unlike closed-end funds that gradually build holdings over several years, leaving investors exposed to blind pool risk and higher concentration early in the fund’s life cycle.
When secondaries are layered into an evergreen structure, this diversification benefit is boosted. A single LP-led secondary transaction typically involves acquiring a portfolio which may hold dozens of underlying companies. As a result, investors gain instant exposure across managers, vintages, sectors, regions, and strategies.
This level of granularity and breadth in diversification is difficult to replicate through primary commitments or direct investments alone. For investors, it means faster access to a diversified portfolio achieved from a single entry point.
A strategic and opportunistic approach
The convergence of evergreen structures and the secondary market represents significant progress for private equity. By combining the liquidity profile of secondaries with the reinvestment mechanics of evergreen funds, investors can achieve a more efficient, diversified exposure to private equity whilst benefitting from more flexibility and control.
While this tandem is powerful, execution matters. Managers may fall into the trap of using secondary markets solely for their attractive entry discounts, neglecting the quality of investments, which could affect long-term profitability. Likewise, inadequate management of the liquidity component can jeopardise the effectiveness of the structure.
That’s why, at Carmignac, our rooted active management plays a key role, entailing not only skilled investment selection but also careful portfolio monitoring and liquidity management, leveraging over 35 years of expertise in public markets. This way, we ensure that Carmignac Private Evergreen stays true to its objective of offering flexibility and control.
The results are already visible: since inception on 15 May 2024, secondary investments have generated liquidity equivalent to 24%1 of our investments in Private Assets (Distributions to Paid In or “DPI”), helping us both meet redemptions and reinvest seamlessly. At the same time, performance since inception has been driven as much by fundamental value creation as by entry discounts – demonstrating the solid foundation of the fund’s strategy.
Carmignac Private Evergreen
Carmignac Private Evergreen F EUR ACC
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 6/7
- SFDR - Fund Classification**
- Article 8
*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.
Main risks of the fund
Fees
- Entry costs
- 4.00% max. of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge
- Exit costs
- 5.00% Max. of your investment before it is paid out to you. 5% could be the maximum amount that may be charged to you. For A and I share classes, additional 5% could be the maximum amount that may be charged to you as the Early Redemption Fees if you request to redeem
your Shares within eighteen (18) months of the launch of the Sub-Fund.
- Management fees and other administrative or operating costs
- 1.71% of the value of your investment per year. This estimate is based on actual costs over the past year.
- Performance fees
- 15.00% of the Sub-Fund's positive returns subject to a five per cent (5%) Hurdle Rate. The real amount varies according to the
performance of your investment.
- Transaction Cost
- 0.03% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell.
Performance
| Carmignac Private Evergreen | +0.6 | +25.3 |
| Carmignac Private Evergreen | +4.8% | - | +18.2% |
Source: Carmignac at Sep 30, 2025.
Date of 1st NAV : 15/05/2024.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The Fund presents a risk of loss of capital.
The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
Reference Indicator: -
This document is issued by, or communicated on behalf of, Carmignac Middle East Ltd, a company incorporated under the laws of the Dubai International Financial Centre with company number CL 13413 registered at GD-PB-04-01-OF-01-0, Level 1, DIFC Fund Centre, Level POD, Gate District Precinct Building 04, Dubai International Financial Centre, Dubai, United Arab Emirates and regulated by the Dubai Financial Services Authority under reference number F013638.
This document is intended solely for Professional Clients and Market Counterparties, as defined under the applicable rules of the Dubai Financial Services Authority (“DFSA”). It must not be relied upon by, or distributed to, Retail Clients or any other person.
The fund(s) referred to in this document are foreign fund(s) domiciled and regulated in Luxembourg by the Commission de Surveillance du Secteur Financier (“CSSF”). Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. Carmignac Private Evergreen refers to the Private Evergreen sub-fund of the SICAV Carmignac S.A. SICAV – PART II UCI, registered with the Luxembourg RCS under number B285278. Unless expressly stated otherwise, they are not domiciled in, authorised by, or subject to regulation or approval by the DFSA. The DFSA has not approved, reviewed or verified this document, the prospectus or any other fund documentation, and the authority does not accept responsibility for the information contained in them or for the merits of an investment in the fund(s).
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