Wealthy individuals are increasingly investing in alternative assets, including evergreen funds which require rapid deployment of capital to prevent loss of value. Concerns are rising about market distortions as more managers rush to spend money simultaneously, potentially limiting future returns or causing negative outcomes.

Evergreen private market funds total around $427 billion, with projections to exceed $1 trillion in five years. Major players like Goldman, Apollo Global, Brookfield, and KKR offer these funds. The secondary market is a key area of concern as more evergreen funds narrow the discount for existing ownership stakes, impacting traditional buyers.

Competition for secondary deals is intensifying, with retail funds outbidding traditional buyers in auctions. The influx of money in the private markets may erode the private market premium over time. Investors should understand that evergreen funds offer liquidity trade-offs, and education on asset allocation is crucial to manage expectations and risks.

Read more at CNBC: Goldman’s Marc Nachmann warns of ‘deployment pressure’ from evergreen funds