Sam Heller reports that Morgan Stanley Investment Management has launched its first evergreen private equity fund, the North Haven Private Asset Fund, targeting high-net-worth investors and distributed initially through Morgan Stanley Wealth Management. The fund, structured as a closed-end tender offer vehicle, aims to provide exposure to private equity through co-investments and secondaries, with 80%–90% of assets in private investments and the rest in liquid holdings.
The fund features a 12.5% incentive fee in addition to a 1.25% management fee—an uncommon structure among tender offer funds. Kimberly Flynn, President of XA Investments, noted that fewer than 5% of such funds include return-based incentive fees, which raise the bar for investor suitability. “Potentially, with this fee, the performance is better, but they’re going to get paid an incentive for it, and so the suitability threshold is higher,” she said, adding that this structure may restrict access to a narrower group of qualified investors.
Flynn also highlighted a broader trend in the alternatives space. “The demand for evergreen has well surpassed the demand for drawdown or term funds, and so the whole industry is shifting into evergreen—not just evergreen registered funds, but evergreen private funds,” she said. The fund launch aligns with shifting investor priorities, especially as fewer companies go public and investors seek longer-duration strategies like continuation funds.
Looking forward, Flynn sees evergreen funds becoming central to portfolio construction across wealth platforms. “They’re being used as core building blocks in model portfolios, the alts leg of a unified managed account, and even in target-date funds for defined contribution programs,” she said.
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