| | | | | The Research Pitch | | July 5, 2025 | | | | | | PE First Looks: Q2 data is here! Access the key top-line metrics that will power our upcoming PE reports across these three editions: Global, the US, and Europe. Get the data.
AI still dominates VC data: For deal value in Q2, AI companies once again led the way, claiming 64% of VC raised in the US and 53% worldwide. To access all of the data, click here.
June performance: The S&P 500 finished last month pushing into all-time highs. Our Global Markets Snapshot breaks down a month of returns across dozens of indexes and sectors. Read it here.
Your views on ESG and impact: We recently launched our 2025 Sustainable Investment Survey and would appreciate your help in accurately quantifying sentiment around ESG, impact investing, and more. Take the survey. (We have prizes!) | | | | | | | | | Not all evergreen funds are created equal | | As more first-time private market investors enter through evergreen fund structures, understanding what they're actually getting in return from their investments is becoming critical. Unlike traditional private equity or real estate drawdown vehicles, evergreen funds offer continuous fundraising, simplified allocation management, straightforward tax reporting, and periodic liquidity. These structural differences have unlocked significant investor interest from the wealth channel, a boon to asset manager flows during a period where institutional LP fundraising is challenged. However, investors need to understand the risk and return profiles they are getting, relative to alternative opportunities. Many funds benchmark to public market indexes, which helps assess whether the funds deliver on generating returns attractive enough relative to simpler, more liquid public options. Yet, the asset mixes and portfolio construction of private market-focused evergreen funds are materially different from publicly traded assets. Standard private market indexes and benchmarks do a better job of mapping to the underlying holdings, but there are significant hurdles to creating like-for-like return comparisons. Given these challenges, we advocate for investors to consider an index product that uses peer groups of similar evergreen funds to anchor performance comparisons by strategy, structure, and portfolio characteristics. In our latest research, we have constructed preliminary evergreen fund indexes across private credit, real estate, infrastructure, and private equity strategies, using return data from approximately $100 billion in AUM within the Morningstar Direct platform.  | | Click to see the full-size chart on evergreen fund returns. | These benchmarks help address two key needs: understanding how individual funds perform relative to peers, and evaluating what investors earn in aggregate from these structures. Over the five years ending in April 2025, private credit strategies posted strong results, with the credit index delivering a 9.3% annualized return, exceeding high-yield bonds and leveraged loans. Real estate, by contrast, trailed publicly traded comparables meaningfully at just 4%. The secondaries index—made up of a mix of PE, venture, and multiasset funds leveraging the market for private fund stakes—led the pack at 11%. However, some of that has come from funds purchasing assets at discounts to NAV and marking them back up. Those types of gains may not be sustainable over the long run. While many evergreen products advertise their ability to capture the illiquidity premium traditionally associated with private markets, the results have been mixed with the relatively short history available. Even over shorter timeframes, return dispersion has been wide. About 5% of the private market-focused interval and tender offer funds in our dataset with at least one year of returns have delivered negative performance since inception. Real estate strategies in particular have been challenged. PE- and VC-focused evergreen funds are also growing in number, but whether these less cash-generative, exit-dependent strategies can thrive in a semi-liquid structure remains an open question. Portfolio construction, asset mix, and strategy focus all play a major role in shaping outcomes. Even in private credit, fund strategies cross between ABF and direct lending to a mixture of bank loans and CLOs. One-year returns through April 2025 ranged from just 3% at the bottom decile to 11.5% at the top. For many investors, evergreen funds represent a first step into private markets. With trillions of dollars expected to flow from the wealth channel over the next decade, the need for standardized, relevant return benchmarks has never been greater. Read more in our analyst note: The Return of Evergreen Funds We are continuing to expand the number of funds included in our dataset to make it easier for investors to discover evergreen offerings and evaluate their performance. Expect more developments on this front in the coming months. As always, we welcome any questions or feedback. | | | | | | | The state of semi-liquid funds | | The semi-liquid fund universe—covering interval funds, tender-offer funds, and nontraded vehicles like BDCs and REITs—continues to grow rapidly as asset managers race to serve the private wealth channel. According to Morningstar's new State of Semi-Liquid Funds 2025, total net assets in these vehicles reached $344 billion at the end of 2024, up 60% from 2022. Credit has cemented itself as the dominant asset class, accounting for $188 billion in net assets, led by private credit funds such as Blackstone's and Cliffwater's offerings.  | | | While positioned as a more accessible way to invest in private markets, our Morningstar colleagues emphasize that semi-liquid funds come with significant tradeoffs. Fee loads are high, averaging over 3% annually, and many structures rely on portfolio-level leverage. Incentive fee designs often tilt in favor of managers. Meanwhile, private equity and real estate semi-liquid funds have seen mixed growth and performance. PE offerings have lagged public benchmarks since inception, while real estate funds are experiencing net outflows amid valuation resets and redemption requests. Despite these challenges, product momentum is strong. Interval and tender offer funds, in particular, are on pace to exceed 2024's record for new launches. Based on our own forecasts, we expect the global market for wealth-focused offerings to surpass $1 trillion in the next few years, underscoring their growing significance. For more data and analysis, download Morningstar's State of Semi-Liquid Funds 2025 report. PitchBook clients can access more of our LP-focused commentaries in our dedicated workspace. | | | | | | | | | | | | | | | |
July 8-23: Join our midyear outlooks webinar series to hear about shifts in private market expectations amid increased uncertainty across the VC, PE, and credit segments. We'll also have regional sessions for EMEA and APAC. More information here.
July 14: Another upcoming webinar will focus on the Australian VC landscape, highlighting the market's unique challenges and opportunities, as well as expectations for growth in the coming years. Register here.
July 24: We invite you to visit the PitchBook booth at ACG Seattle's Northwest Middle Market Growth Conference. Our global head of quantitative research & market intelligence, Dan Cook, will speak in the M&A Financing and Market Update morning session.
Sept. 24-26: PitchBook is partnering with IPEM to offer a €500 discount for IPEM Paris 2025, an event for private market investors and fund managers from around the world. Get your pass. | | | | | | | | | |
Our insights and data featured in the press:
• More than 400 global defense tech companies have raised nearly $13 billion so far in 2025. [Axios]
• Whether it's public or private, the US is simply more bullish and Europe is still far more conservative. [Forbes]
• Why VC funding for indoor farming has dried up. [WSJ]
• In 2024, 39% of early-stage capital in Australia came from overseas, compared with 21% in the US and 27% in Europe. [Bloomberg]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.
| | | | | | | | | | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 457 Deals | 2022 People | 730 Companies | 19 Funds | | | | | | | | | | | | | | |
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