Definition
What is Evergreen Fund?
An open-ended fund with no planned wind-down date — permanently open for new subscriptions and (subject to gating) redemptions.
An evergreen fund is the wholesale analogue of a retail managed fund: capital flows in and out continuously, with no vintage structure and no planned termination date. Most NZ wholesale private credit funds operate as evergreen — Pallas Capital's three funds (PFTNZ Feeder, Senior Mortgage, High Yield Mortgage), First Mortgage Trust, Hunter Diversified Private Credit, Midlands Income, Squirrel Wholesale Home Loan, PCG NZ Private Debt.
Why evergreen suits private credit: the underlying loans roll continuously — new loans originated, existing loans repaid — and the fund's investor base needs to match that flow. Evergreen accommodates both new investor entry and existing investor exit through the same liquidity-window mechanism.
Investor experience: - Subscription — can apply any time, subject to manager acceptance, with capital deployed at the next pricing point. - Distribution — typically quarterly (sometimes monthly) cash from loan interest, paid as tax-paid PIE income or as gross flow-through for LP structures. - Redemption — subject to the fund's notice and frequency rules. Most evergreen wholesale credit funds offer monthly or quarterly redemption with 30-90 day notice and gate-suspension provisions.
vs Closed-End: evergreen funds are NOT vintage-structured. There's no "Fund I, Fund II, Fund III" sequence. Investors who join in 2025 face the same fund as investors who joined in 2018, with returns reflecting the fund's prevailing portfolio at each holding period.
Operating lifespan: evergreen funds typically run for decades — FMT has operated since 1996, Pallas since 2016. The structure doesn't require a wind-down event; the fund continues as long as there is investor demand and a viable origination pipeline.
FMA distinction noted in CLAUDE.md fund-vs-offer model: an evergreen fund on Wholesale Investor NZ shows as "Open for Subscription" without a separate Offer row, because there is no time-bounded raise — the fund itself is permanently open.
Related Terms
Open-Ended Fund
A fund that continuously accepts new subscriptions and redemptions, typically with periodic (monthly, quarterly) pricing and liquidity windows.
Private Credit
Non-bank lending to businesses and property developers, offering regular income and typically secured positions.
First Mortgage
A loan secured by first-ranking security over property, giving the lender priority claim in default.
PIE Fund (Portfolio Investment Entity)
A tax-efficient fund structure where tax is calculated at your Prescribed Investor Rate, often lower than marginal rates.
Educational Content Disclaimer
This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
Before making any investment decision, you should seek independent advice from appropriately qualified professionals. Wholesale Investor does not recommend or endorse any particular investment, strategy, or fund manager.