Select your local Natixis site for products and services by region

Americas
Asia Pacific
Europe
Location not listed?
eagle
Next decade investing
The seismic shifts shaping the investment landscape today, and the key trends that will continue to define investor thinking over the next ten years.
About us
Private assets

Private equity funds: finding the right balance between liquidity and returns

July 07, 2025 - 6 min

Individual investors have often not been permitted the same access to private companies as public ones. Yet more than 80% of all companies are neither listed nor traded on the public markets.  The good news is that owing to structural and regulatory developments, private equity investments are being opened up to more possibilities, with new formats available that are adapted to individual investors’ requirements.

Gad Amar, Head of Distribution for Western Europe, and Nicolas Audhoui-Darthenay, Head of Private Assets Product at Natixis Investment Managers, share their views on the benefits, and limitations, of so-called ‘evergreen’ funds.

 

What are the expectations of retail investors when they choose private equity strategies?  

Gad Amar: first of all, it is important to remember that private equity is mainly aimed at investors who already own other asset classes in their portfolio (equities, bonds, derivatives, etc) and who are looking for additional sources of diversification and returns. 

In exchange for a higher target return and diversification benefits, private equity assets are inherently illiquid if held directly and require specific expertise as well as access to transactions. This is where the expertise of management companies comes into play, providing sourcing and structuring to offer a suitable solution. 

Retail investors are asking for flexibility in their investments, especially to deal with life events or any needs which may change over time. Closed-end private equity funds with multiple capital calls and holding periods of five to nine years do not meet those requirements. The creation of open-ended or ‘evergreen’ funds investing in private equity that are accessible to individuals makes it possible to remove this obstacle in the democratisation of private assets. 

 

What liquidity constraints should be accepted when choosing this asset class?

Nicolas Audhoui-Darthenay: as opposed to traditional equity or bond funds that provide a daily net asset value (open-ended funds where the investor can enter or exit daily), an evergreen private equity fund can only offer limited liquidity with well-defined subscription and redemption windows, for example monthly or quarterly. The liquidity offered to end investors must also be adapted to the asset class, with two main families of evergreen private equity funds: funds whose liquidity is based on an insurer and those that manage their liquidity internally. 

The former typically offer regular liquidity (between weekly and monthly) with a small pocket of liquid assets. On the other hand, they are only distributed in life insurance and often within a captive network, for example the life insurer of the same group or close to the management company of the fund in question. This leads to a more limited supply for end investors with sometimes disappointing returns. 

For evergreen funds that manage their liquidity internally, this is made possible by the manager who also selects assets based on their ability to generate regular positive flows and/or to be resold if necessary. The counterparty is sometimes a larger pocket of liquid assets, historically around 30% in France, but a refined structure makes it possible to reduce the size of this pocket, for example via funds of funds. In any case, these funds can be offered to all types of clients and are free from dependence on the life insurer, while remaining eligible for it according to the regulatory formats (eg FCPR Fonds Commun de Placement à Risque). 

To clarify, it is also possible to manage liquidity through an outflow limitation mechanism, such as gating. This mechanism can only be used on an exceptional basis on French funds (eg FCPR). The new European ELTIF (European Long Term Investment Fund) format allows this, but it is not without risk for end clients, who could find part of their savings blocked at a time when they need it. It is therefore necessary to be cautious with ELTIF funds between those that have liquidity based on the fund's ability to generate flows and/or sell assets and those that offer liquidity mainly based on gating. 

Gad Amar: to add to this, these products are new to retail investors, so we attach great importance to making sure they are well understood by investors. That's why we offer comprehensive educational articles and training modules to ensure greater transparency on technical aspects. We launched a Private Assets Academy that anyone can access online for free. 

 

How can we expect the asset class to perform in the long term? 

Gad Amar: private equity allows you to benefit from an illiquidity premium. The asset class is therefore aiming for double-digit returns and a target return above 10% seems, to us, to be the fair long-term counterpart to the complexity and lower liquidity of the asset class. Beyond 10% annual performance, you can potentially double your capital every seven years. Over 20 years, your capital could potentially be multiplied by six or seven. This can help ensure a better standard of living for retirement, prepare for your children's studies or any other long-term project. 

 

Is the performance potential of evergreen funds, which are more liquid, lower than that of closed-end funds which are reserved for institutional investors?

Nicolas Audhoui-Darthenay: closed-end funds generally have only a marginal pocket of liquidity, but the individual investor keeps cash to meet the capital calls of closed funds and may have cash waiting to be reinvested at the time of the amortisation of these same funds. As a result, this investor suffers from a dilution of their real performance by this marginal liquidity in their account. 

Conversely, evergreen funds generally have a minority pocket of liquidity that allows the manager to cope with investor outflows. As the investor can more easily decide when to enter and exit from their investment, dilution due to cash in their account is almost non-existent. In a way, for an individual investor, the dilution due to cash that is important at the beginning and end of the life of closed-end funds is replaced by a lesser but permanent dilution. 

As a reminder, the fund launch period excluded, money is immediately deployed in an evergreen fund, since the investor benefits from the fund's previous investments. Whereas deployment can take several years for a closed fund, with significant waiting periods for liquidity for the end client. If the "domestic" liquidity pocket of an evergreen fund is optimised, the end client could have returns equal to or close to the actual returns of closed-end funds. At Natixis IM, we are committed to optimising the size of the liquid pocket. Thus, funds can be structured with up to 80% invested in "pure" private equity. 

 

In terms of private markets, does Natixis IM allows its clients to access the full range of services offered by the affiliated asset management companies within the group?

Gad Amar: private assets (real estate, infrastructure, private equity, etc.) represent more than €100 billion in assets under management at Natixis IM. We offer a single point of access to entrepreneurial, high-conviction asset managers with a proven track record in private assets.  

We offer diversified investment solutions, which cover private equity, private debt, real estate, infrastructure and multi private assets solutions, in the European, American and Asian markets. Our range also integrates sustainability-focused solutions including impact private equity, energy transition infrastructure or natural capital. 

In terms of accessibility, we offer several solutions accessible to individuals, in particular via evergreen funds focused on pure private equity or multi private assets. 

This material has been provided for information purposes only to investment service providers or other Professional Clients, Qualified or Institutional Investors and, when required by local regulation, only at their written request. This material must not be used with Retail Investors.

In the E.U.: Provided by Natixis Investment Managers International or one of its BRANCH offices listed below. Natixis Investment Managers International is a portfolio management company authorized by the Autorité des Marchés Financiers (French Financial Markets Authority - AMF) under no. GP 90-009, and a simplified joint-stock company (société par actions simplifiée - SAS) registered in the Paris Trade and Companies Register under no. 329 450 738, Registered office: 43 avenue Pierre Mendès France, 75013 Paris. Germany: Natixis Investment Managers International, Zweigniederlassung Deutschland (Registration number: HRB 129507). Registered office: Senckenberganlage 21, 60325 Frankfurt am Main. Italy: Natixis Investment Managers International Succursale Italiana (Registration number: MI-2637562). Registered office: Via Adalberto Catena, 4, 20121 Milan, Italy. Netherlands: Natixis Investment Managers International, Dutch BRANCH (Registration number: 000050438298), Registered office: Stadsplateau 7, 3521AZ Utrecht, the Netherlands. Spain: Natixis Investment Managers International S.A., Sucursal en España (Registration number: NIF W0232616C), Registered office: Serrano n°90, 6th Floor, 28006  Madrid, Spain. Luxembourg: Natixis Investment Managers International, Luxembourg BRANCH (Registration number: B283713), Registered office: 2, rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg. Belgium: Natixis Investment Managers International, Belgian BRANCH (Registration number: 1006.931.462), Gare Maritime, Rue Picard 7, Bte 100, 1000 Bruxelles, Belgium.

In Switzerland: Provided for information purposes only by Natixis Investment Managers, Switzerland Sàrl (Registration number: CHE-114.271.882), Rue du Vieux Collège 10, 1204 Geneva, Switzerland or its representative office in Zurich, Schweizergasse 6, 8001 Zürich.

In the British Isles: Provided by Natixis Investment Managers UK Limited which is authorised and regulated by the UK Financial Conduct Authority (FCA firm reference no. 190258) - registered office: Natixis Investment Managers UK Limited, Level 4, Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA. When permitted, the distribution of this material is intended to be made to persons as described as follows: in the United Kingdom: this material is intended to be communicated to and/or directed at investment professionals and professional investors only; in Ireland: this material is intended to be communicated to and/or directed at professional investors only; in Guernsey: this material is intended to be communicated to and/or directed at only financial services providers which hold a license from the Guernsey Financial Services Commission; in Jersey: this material is intended to be communicated to and/or directed at professional investors only; in the Isle of Man: this material is intended to be communicated to and/or directed at only financial services providers which hold a license from the Isle of Man Financial Services Authority or insurers authorised under section 8 of the Insurance Act 2008.

In the DIFC: Provided in and from the DIFC financial district by Natixis Investment Managers Middle East (DIFC BRANCH) which is regulated by the DFSA. Related financial products or services are only available to persons who have sufficient financial experience and understanding to participate in financial markets within the DIFC, and qualify as Professional Clients or Market Counterparties as defined by the DFSA. No other Person should act upon this material.  Registered office: Unit  L10-02, Level 10 ,ICD Brookfield Place, DIFC, PO Box 506752, Dubai, United Arab Emirates

In Japan: Provided by Natixis Investment Managers Japan Co., Ltd. Registration No.: Director-General of the Kanto Local Financial Bureau (kinsho) No.425. Content of Business: The Company conducts investment management business, investment advisory and agency business and Type II Financial Instruments Business as a Financial Instruments Business Operator.

In Taiwan: Provided by Natixis Investment Managers Securities Investment Consulting (Taipei) Co., Ltd., a Securities Investment Consulting Enterprise regulated by the Financial Supervisory Commission of the R.O.C. Registered address: 34F., No. 68, Sec. 5, Zhongxiao East Road, Xinyi Dist., Taipei City 11065, Taiwan (R.O.C.), license number 2020 FSC SICE No. 025, Tel. +886 2 8789 2788.

In Singapore: Provided by Natixis Investment Managers Singapore Limited (NIM Singapore) having office at 5 Shenton Way, #22-05/06, UIC Building, Singapore 068808 (Company Registration No. 199801044D) to distributors and qualified investors for information purpose only. NIM Singapore is regulated by the Monetary Authority of Singapore under a Capital Markets Services Licence to conduct fund management activities and is an exempt financial adviser. Mirova Division (Business Name Registration No.: 53431077W) and Ostrum Division (Business Name Registration No.: 53463468X) are part of NIM Singapore and are not separate legal entities. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

In Hong Kong: Provided by Natixis Investment Managers Hong Kong Limited to professional investors for information purpose only.

In Australia: Provided by Natixis Investment Managers Australia Pty Limited (ABN 60 088 786 289) (AFSL No. 246830) and is intended for the general information of financial advisers and wholesale clients only.

In New Zealand: This document is intended for the general information of New Zealand wholesale investors only and does not constitute financial advice. This is not a regulated offer for the purposes of the Financial Markets Conduct Act 2013 (FMCA) and is only available to New Zealand investors who have certified that they meet the requirements in the FMCA for wholesale investors. Natixis Investment Managers Australia Pty Limited is not a registered financial service provider in New Zealand.

In Korea: Provided by Natixis Investment Managers Korea Limited (Registered with Financial Services Commission for General Private Collective Investment Business) to distributors and qualified investors for information purpose only.

In Colombia: Provided by Natixis Investment Managers International Oficina de Representación (Colombia) to professional clients for informational purposes only as permitted under Decree 2555 of 2010. Any products, services or investments referred to herein are rendered exclusively outside of Colombia. This material does not constitute a public offering in Colombia and  is addressed to less than 100 specifically identified investors.

In Latin America: Provided by Natixis Investment Managers International.

In Chile: Esta oferta privada se inicia el día de la fecha de la presente comunicación. La presente oferta se acoge a la Norma de Carácter General N° 336 de la Superintendencia de Valores y Seguros de Chile. La presente oferta versa sobre valores no inscritos en el Registro de Valores o en el Registro de Valores Extranjeros que lleva la Superintendencia de Valores y Seguros, por lo que los valores sobre los cuales ésta versa, no están sujetos a su fiscalización. Que por tratarse de valores no inscritos, no existe la obligación por parte del emisor de entregar en Chile información pública respecto de estos valores. Estos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el Registro de Valores correspondiente.

In Mexico: Provided by Natixis IM Mexico, S. de R.L. de C.V., which is not a regulated financial entity, securities intermediary, or an investment manager in terms of the Mexican Securities Market Law (Ley del Mercado de Valores) and is not registered with the Comisión Nacional Bancaria y de Valores (CNBV) or any other Mexican authority. Any products, services or investments referred to herein that require authorization or license are rendered exclusively outside of Mexico. While shares of certain ETFs may be listed in the Sistema Internacional de Cotizaciones (SIC), such listing does not represent a public offering of securities in Mexico, and therefore the accuracy of this information has not been confirmed by the CNBV. Natixis Investment Managers is an entity organized under the laws of France and is not authorized by or registered with the CNBV or any other Mexican authority. Any reference contained herein to “Investment Managers” is made to Natixis Investment Managers and/or any of its investment management subsidiaries, which are also not authorized by or registered with the CNBV or any other Mexican authority.

In Uruguay: Provided by Natixis IM Uruguay S.A. Office: San Lucar 1491, Montevideo, Uruguay, CP 11500. The sale or offer of any units of a fund qualifies as a private placement pursuant to section 2 of Uruguayan law 18,627.

In Brazil: Provided to a specific identified investment professional for information purposes only by Natixis Investment Managers International. This communication cannot be distributed other than to the identified addressee. Further, this communication should not be construed as a public offer of any securities or any related financial instruments. Natixis Investment Managers International is a portfolio management company authorized by the Autorité des Marchés Financiers (French Financial Markets Authority - AMF) under no. GP 90-009, and a simplified joint-stock company (société par actions simplifiée - SAS) registered in the Paris Trade and Companies Register under no. 329 450 738. Registered office: 43 avenue Pierre Mendès France, 75013 Paris.

The above referenced entities are business development units of Natixis Investment Managers, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide. The investment management subsidiaries of Natixis Investment Managers conduct any regulated activities only in and from the jurisdictions in which they are licensed or authorized. Their services and the products they manage are not available to all investors in all jurisdictions.

Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third party sources, it does not guarantee the accuracy, adequacy, or completeness of such information.

The provision of this material and/or reference to specific securities, sectors, or markets within this material does not constitute investment advice, or a recommendation or an offer to buy or to sell any security, or an offer of any regulated financial activity. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. The analyses, opinions, and certain of the investment themes and processes referenced herein represent the views of the individual(s) as of the date indicated. These, as well as the portfolio holdings and characteristics shown, are subject to change and cannot be construed as having any contractual value. There can be no assurance that developments will transpire as may be forecasted in this material. The analyses and opinions expressed by external third parties are independent and does not necessarily reflect those of Natixis Investment Managers. Any past performance information presented is not indicative of future performance. 

This material may not be distributed, published, or reproduced, in whole or in part.

All amounts shown are expressed in USD unless otherwise indicated.

DR-72010