Episode summary
Episode 35: Navigating the Evergreen Fund Boom: Market Insights with Guest Kim Flynn, XA Investments
Alternative Allocations
· · Hosts: Tony Davidow, Christine Gaze · Guests: Kimberly Ann Flynn
Summary
Kim Flynn says the evergreen fund market has moved from a niche private credit wrapper into a broad private markets platform, with more than 300 funds and roughly 25% compounded annual growth. She argues that private credit still dominates because it is easier to support with daily NAVs and has been easier to sell on yield, but the opportunity set is widening into private equity, infrastructure, hedge funds, asset-backed credit, and sector-specific themes like tech, AI, and possibly healthcare or energy.
A central theme is that advisers now face a due diligence problem, not a scarcity problem. Flynn says many products are new, most have limited track records, and advisers should narrow the universe based on liquidity, strategy, manager resources, and whether the sponsor is transparent about how the fund handles redemptions. She cautions that liquidity should be treated as a safety valve, not a promise of quick exits.
Flynn is skeptical of simplistic public-private blends and says model portfolio implementation is still early because rebalancing and liquidity constraints remain difficult. Her broader view is that the market is diversifying, but the winners will be the managers with real process, capital discipline, and long-enough track records to prove they can deliver through different market regimes.
Key takeaways
- Flynn says the interval and tender offer fund market now has over 300 funds and has been growing about 25% annually.
- She says private credit remains about half the market, but saturation risk is rising in direct lending, asset-backed, structured credit, and multistrategy credit.
- Flynn argues advisers should screen aggressively on liquidity, track record, and manager depth because many new funds are too young to evaluate confidently.
- She expects private equity, hedge funds, infrastructure, and sector-specific launches like tech, AI, healthcare, and energy to drive the next wave.
- Flynn warns that public-private partnership products may create implementation and overlap problems for advisers, especially inside model portfolios.
Notable quotes
“We're at the point where there's over 300 funds. So I think a lot of financial adviserss are grappling with on one hand a lot of options”
“the market has been growing at about 25% compounded annual growth. We've really got a lot of new entrance that are going to be coming into the marketplace”
“private credit right now is about half the market. It's the one area of the market that we're concerned about saturation”
“You do need some liquid or semi-liquid securities to meet redemptions, but I have a hard time understanding where 5050 public private products fit”
“if you can't get comfortable with what they're doing and understand how they're generating the return. if somebody hasn't done the due diligence, you can always pass”
How the episode opens
This is Alternative Allocations by Franklin Templeton, a monthly podcast where we share practical, relatable advice and discuss new investment ideas with leaders in the field. Please subscribe on Apple, Spotify, or wherever you get your podcast to make sure you don't miss an episode. Here is your host, Tony Davidau.
Welcome to the latest episode of the Alternative Allocations podcast series. I'm thrilled to be joined today by Kim Flynn, one of the real pioneers in the growth and the evolution of evergreen funds in the private markets. Welcome, Kim.
Thank you so much for having me. — And Kim, you've been one of the real significant voices and really chronicling what's going on with the growth of interval and tender offer funds, what we typically refer to as evergreen or perpetual funds. and you just came out with your latest report which is really telling us where the industry has evolved. What does the report tell us about the growth of the market today both in its size and its diversity?
We're at the point where there's over 300 funds. So I think a lot of financial adviserss are grappling with on one hand a lot of options, a lot of good choices, but you're trying to decide the best firms and the best strategies to diversify your portfolio. In the 10 years that we've been doing research on the interval fund marketplace, it's the first time that advisers have had to grapple with that because the market has been growing at about 25% compounded annual growth.
We've really got a lot of new entrance that are going to be coming into the marketplace creating even more choice. I think that leaves advisers on one hand excited because there's so many new private market strategies and we're seeing more than just what we saw in the early days in terms of private equity and private credit.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- evergreen funds
- interval and tender offer funds
- private market growth
- liquidity and investment horizon expectations
- due diligence for crowded products
Companies and tickers mentioned
- BEN
- XA Investments
- Franklin Templeton Private Markets
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Alternative Allocations, this episode and its artwork belong to Franklin Templeton. Octagon is not affiliated with the show; this page is an independent summary.
