There’s a lot of buzz around evergreens these days. In an exciting collaboration, Alt Goes Mainstream has teamed up with iCapital and their Co-Founder & Managing Partner, Nick Veronis, who also heads Portfolio Management. Together, they’re exploring the evergreen dilemma, bringing insights from top professionals in the private market sector.
This insightful three-part series features industry experts from powerhouses like Vista Equity Partners, KKR, and Hamilton Lane. It aims to shed light on the rapidly expanding field of evergreen strategies in private markets and their significant impact on wealth management channels.
For those interested, you can catch this series on Apple Podcasts, Spotify, or Transistor.
The first episode is a treat as Nick and I sit down with Dan Parant from Vista Equity Partners. Here’s a quick rundown of the episode’s topics:
We kick off with a warm welcome and introduce our esteemed guest (00:19). Dan shares the inspiring journey of how Vista was founded and how the company has evolved over time (00:44). He delves into Vista’s unique investment strategy (02:12), and offers insights into his own background and pivotal role at the company (03:19).
The conversation then shifts to the core of what drives Vista—its investment thesis in enterprise software (04:18) and the resilience that sector maintains (05:29). We explore the significance of private markets (08:19) and the notable shift we’re seeing from public to private investments (09:26).
Evergreen funds are dissected to highlight their benefits (10:42), and Dan explains how these portfolios are constructed (12:16). We discuss the advantages of the evergreen structure (14:21) and why more private companies are opting to stay private longer (15:36).
Further, Dan briefs us on Vista’s strategy when taking companies private (19:29) and the firm’s approach to companies of various sizes (21:21). The dialogue moves toward a comparison of growth versus yield in evergreen funds (22:29), emphasizing the critical role of specialized expertise in these investments (23:23).
We delve into the synergy between scale and success in private equity (23:32), and analyze the performance of large buyout funds (24:41). The dynamics within evergreen funds are underlined (25:47), along with the challenges inherent in managing such structures (27:04).
We continue by discussing performance scale (27:31), deal flow, and how portfolios are constructed (28:06). The importance of choosing the right manager is underscored (29:09) and strategies for minimizing cash drag are recommended (30:37).
Specialization and selectivity in deals are pivotal topics (31:07), and there’s a detailed discussion on how to educate investors about evergreen structures (32:00). Paths like omnichannel education strategies (33:23) and specific product training sessions populate our discourse (34:21).
Liquidity within evergreen structures is another topic of interest (35:23), paired with methods for structuring and defining liquidity parameters (37:00). We advocate for a long-term mindset in evergreen investments (38:00) while casting an eye on the future of these strategies (40:12) and their ability to widen investor reach (40:22).
Efforts to allocate investments efficiently for individual investors are spotlighted (42:07), rounding off with our concluding thoughts (43:50) and some legal and compliance reminders (44:23).
