Are Evergreens the Next Big Crisis

Private markets have entered their “Robinhood moment.” What was once reserved for pensions and endowments is now being opened to everyday investors. Through sleek fintech platforms and evergreen structures, basically anyone can now buy into private equity or private credit with minimums as low as $10,000 to $25,000. The pitch is simple: institutional returns, limited volatility, and liquidity on demand. However, this “accessibility” comes with risks few talk about.

The rise of evergreens has unfolded during one of the longest bull markets in history. Investors have been trained to expect smooth returns, high IRRs, and easy redemptions. Yet those returns are largely backward looking. They are built on funds raised in an era of zero interest rates and cheap leverage. The law of “large numbers” and the flood of new capital makes it nearly impossible for futures vintages to match those returns. The more they scale, the harder is becomes to deliver alpha.

Beneath the slick marketing is a structural mismatch. Evergreens promise quarterly liquidity while owning assets that take years to sell. In calm markets, redemptions tay low and inflows remain steady. But what happens when sentiment turns? If private credit defaults rise or exit markets freeze, those seemingly stable valuations could quickly crack. And when they do, the first to rush out won’t be institutions, it’ll be the $25k and $100k investors who believed their money was liquid. A flood of redemptions would forces asset sales, gating, or valuation cuts; essentially a modern “run on the bank.”

Evergreens have thrived in calm waters, but the storm will reveal their flaws. Their rise has been fueled by optimism, easy money, and a market that’s forgotten what pain looks like. These funds have never been tested through a true downturn. When the tide turns, investors will discover that liquidity is not a promise, it’s a privilege. The belief that illiquid assets can be treated as cash is the illusion that could trigger the next crisis.