The growth of private markets allocations in institutional portfolios is well covered. More recently however, the focus has been re-directed to the private wealth side. The cynics will argue that this is because the private markets industry needs to tap a new client segment. A more positive argument would be that this also gives individual investors access to an important building block for building diversified portfolios.
“The democratisation of private assets is starting in earnest,” concluded Huw van Steenis, vice chair and partner at consultancy Oliver Wyman, in a recent post on LinkedIn as a response to the executive order signed by President Trump, allowing 401(k) plans to enable better access to private assets.
Tell Media Group recently sat down with Philip Heeroma, head of private wealth Nordics at EQT Group, to discuss private markets in general and the opportunities in the private wealth market in particular. Over the last 30 years, EQT has grown from a Swedish private equity investor to the world’s second largest private markets player based on raised capital in the past five years (according to the 2025 PEI 300 ranking), active across all stages of private equity – from venture and growth equity to buyout. EQT is also among the five largest infrastructure investors globally (according to Infrastructure Investor’s ranking) and with a growing real estate business.
Private wealth is an important segment for EQT and in its half year report, released on July 17, the company writes: “EQT made significant progress in the private wealth segment. EQT Nexus fundraising accelerated, and EQT Nexus Infrastructure was launched, targeting clients across Asia and Europe. In addition, EQT introduced an evergreen product in the US, providing access to EQT’s global Private Capital investments.” The company now manages four active evergreen vehicles and with a fifth in development. The original structure, EQT Nexus, is available in over 20 countries and has reached total assets of some EUR 1,4 billion.
Taking a step back, the traditional private equity model is a closed ended fund structure with a duration of some ten years – divided in different phases such as capital raising, investing, developing the holdings, selling and finally distributing the capital back to investors. This means that the capital allocated by investors is not fully invested from day one.
“One of the challenges for investors is that they don’t know the timing of the investments. As an investor you allocate a fixed sum, but you don’t know when the capital call will come from the manager. That means you have to manage that money until you are requested to send it to the manager. You have the same challenge at the other end – when you get a distribution – as your overall allocation will change,” says Philip Heeroma. He explains that with an evergreen fund, or semi liquid fund, the investor will access a structure that is perpetual where they can buy and sell at certain intervals.
“This also means that your money is fully allocated to the underlying assets from day one. With our Nexus funds, investors are able to buy each month and can sell – with certain restrictions – each quarter,” he says.
According to Philip Heeroma, it’s important that investors understand the differences between warehoused and non-warehoused structures when looking at evergreen structures.
“In a non-warehoused structure, you are exposed to the same J-curve as in a traditional private equity or private credit fund where it takes time to build the portfolio. In a warehoused structure, which is what we did with Nexus, the manager will build the portfolio on their own balance sheet several years before launch. Nexus today consists of some 12 underlying EQT funds, which means you have diversification across different fund vintages – which refers to when the underlying funds began deploying capital. This provides exposure to different market cycles, investment environments, and exit periods,” he explains.
While the evergreen structure was set up with private wealth clients in mind, there is also interest from institutional clients.
”For investors who don’t have any allocation today, this is of course a very straight forward way to gain exposure to a fully invested and well diversified portfolio,” he says and adds that even investors who have started on the journey to build a private markets exposure can find the evergreen structure interesting.
“They can make an investment in an evergreen fund to get the exposure on day one and then reduce the evergreen as their closed end commitments get deployed over time. We have several examples of that,” he says.
Philip Heeroma says that they have also seen an increased interest from large institutional investors with mature private markets programs. “As there is uncertainty when it comes to distributions, they could use evergreen structures as a buffer to ensure they keep the overall exposure to private markets on target instead of using an overcommitment approach which can lead to liquidity mismatches. Evergreen structures have historically been associated with retail investors, but I think that’s changing and we see more and more examples of institutional investors finding use cases for these structures,” he says.
There are different types of evergreen structures – a first generation consisting of a multi-manager structure and a second generation – strategies launched by a single manager with broad and deep private market platforms required for this type of product.
“The challenge in creating and managing an evergreen structure is that you want to ensure that you have continuous investment opportunities, so the capital is fully deployed and generating returns. You don’t want to go out and look for a new company to invest in every time you have inflows to the fund,” Philip Heeroma says and explains that Nexus invests in the same funds as big institutional investors. Nexus also invests directly in underlying companies.
“Nexus is treated like any other large institutional investor,” he says. He also explains that the direct investments that Nexus makes are made available thanks to the fund being an investor in the underlying funds. “It’s not that Nexus invests in something that no one else wants,” he says.
Discussing challenges, Philip Heeroma mentions three different ones. The first is the management of the evergreen structure in a way that matches the desired return profile, which in the case of EQT Nexus, comes from the underlying funds and deals.
”In order to reach the target of 12 – 15 per cent returns it’s not about doing something new but rather trying to match upcoming fund flows with investment opportunities in the best possible way to ensure full deployment. The manager of the fund sits every month with big distributors and investors to understand fund flows in the next three to six months. On the distribution side the challenge is more operational. Many are used to dealing with closed ended funds or UCIT funds, but this sits somewhere in between and that’s a challenge that shouldn’t be underestimated,” he says.
A third challenge is educating the end clients and also educating distributors and advisors. “For some this is a new asset class and then it’s about explaining why private markets could be interesting in the first place. Others are used to closed ended funds and then it’s about explaining how an evergreen structure can fit a portfolio. We have spent a lot of time on this together with our distribution partners and I don’t know how many clients we’ve met in these sessions. You can’t set up this kind of structure and then expect it to sell without doing the educational groundwork,” Philip Heeroma concludes.
The growth of private markets allocations in institutional portfolios is well covered. More recently however, the focus has been re-directed to the private wealth side. The cynics will argue that this is because the private markets industry needs to tap a new client segment. A more positive argument would be that this also gives individual investors access to an important building block for building diversified portfolios. “The democratisation of private assets is starting in earnest,” concluded Huw van Steenis, vice chair and partner at consultancy Oliver Wyman, in a recent post on LinkedIn as a response to the executive orderIf you’re new to Tell Media Group, create an account first.
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