Private assets

Private assets: liquidity and diversification, the strengths of the European evergreen model

June 15, 2026 - 5 min

Romain de Beco

Head of Distribution and Insurance, France & Monaco – Natixis Investment Managers

Nicolas Audhoui-Darthenay

Head of Private Assets Product – Natixis IM

Private assets are increasingly making their way into individual investors’ portfolios, especially for investors who seek higher returns than those of comparable listed assets. But the liquidity offered by open‑ended, or evergreen funds, is under scrutiny. In this area, the US model differs from the European approach, the latter being more regulated and more cautious.

An overview with Nicolas Audhoui‑Darthenay, Head of Private Assets Products at Natixis Investment Managers, and Romain de Beco, Head of Distribution and Insurance for the French market.

What are the expectations of retail investors when they choose private asset strategies and what trade-offs do they have to make between flexibility and returns?

Romain de Beco:

First of all, it is important to remember that private assets are aimed at savers who already have some financial knowledge. They must already be invested in several asset classes — mainly equities and bonds — before seeking to diversify their portfolio with unlisted financial assets. These provide an additional source of diversification and returns, in particular thanks to the illiquidity premium. Indeed, according to France Invest and EY, at the end of 2024, French private equity had an annual net IRR of 12.4% over ten years, a level close to that of infrastructure (12.2%). It’s important to remember that private assets require you to remain invested over a long period of time.

However, individuals need a certain flexibility in their investments, in order to cope with life events, regardless of the type of investment made. Those who are interested in these strategies therefore want the funds in which they invest to offer, on the one hand, a minimum of liquidity, and on the other hand, they want the liquidity offered by the fund, if any, to be reliable. In other words, they want to make sure that there will be no disappointment when they wish to exit their investments. As opposed to closed-end funds, the development of open-ended funds, or evergreen funds, meets this need for flexibility, thanks to clearly defined subscription and redemption windows, for example monthly or quarterly. These vehicles have thus helped broaden access to private assets, by offering a degree of liquidity.

What are the main types of private asset funds available to individuals in Europe?

Nicolas Audhoui-Darthenay:

There are two main types of formats in the world of private asset funds: funds with a local legal format only, such as French FCPRs (fonds communs de placement à risques – mutual funds for risky investments) or Spanish FCRs (fondo de capital riesgo - idem), sold to local retail investors only, and funds targeting the entire European market thanks to the ELTIF label, or European Long-Term Investment Funds.

This label adds some constraints but theoretically allows these funds to be sold to all individual investors in the European Union, not just local investors.

Even though almost all local formats (including FCPR and FCR) can obtain the ELTIF label, the Luxembourg UCI part II format seems to be the standard one for evergreen ELTIF funds aimed at the entire European market.

However, local formats with or without the ELTIF label remain relatively prevalent for historical reasons, but most of all, because of the lack of tax harmonisation. For example, some tax provisions are only possible with certain local formats, such as the tax deferral (often called 163 quinquies B) in France. Similarly, French life insurance contracts can only include French private assets funds (even with an ELTIF label).

What is an ELTIF fund?

An ELTIF, for European Long-Term Investment Fund, is a European regulatory label allowing a private asset fund to be sold to individuals throughout the European Union. Its objective is to help finance the real economy: infrastructure, real estate, private debt, private equity, unlisted SMEs, energy transition, etc.

This regime was created in 2015 and then amended in 2024 in order to make it more flexible, in particular by allowing the creation of ELTIF evergreen funds. Since this reform and with this in mind, an ELTIF must invest at least 55% of its capital in eligible long-term assets, down from 70% previously. This leaves more room to manage liquidity.

How is liquidity managed in retail private asset funds?

Nicolas Audhoui-Darthenay:

There are two main families of funds with distinct liquidity management approaches: closed-end funds and evergreen (or perpetual or open-ended) funds. Closed-end funds do not offer liquidity, are relatively simple to structure and are standardised. However, they are not well suited to the needs of individuals.

Evergreen funds have a more complex structure, which requires greater attention from managers, regulators and investors alike.

Leaving aside the specific case of life insurance, where the insurer plays the role of intermediary between the end investor and the fund, we must first look at what is called “liquidity”.

Among evergreen funds, there are broadly two liquidity management philosophies: one specific to Europe, and the other dominant in the United States. Each has an impact on the way liquidity is managed, as well as on the end performance of the fund.

US « tender offer » funds offer periodic liquidity windows, but for a limited percentage of the funds’ assets. This percentage is left to the discretion of the manager. Liquidity is therefore explicitly limited in volume, which allows the portfolio to focus more on private assets and thus optimise potential returns. However, investors should be aware that, in this type of approach, the capping of redemptions (“gating”) is a standard provision, allowed by both by the regulations and by the funds’ legal documentation.

In Europe, the ELTIF regulation imposes a different operating model from the US approach: the liquidity offered by ELTIF funds depends on the redemption frequency and the notice period in one case, and on the minimum level of liquid assets held by the fund in another case. In both scenarios, outflows are capped at a set percentage of the liquid assets.

The first scenario is closer to the American model, since the manager sets the length of the notice period, albeit with additional constraints. Regardless of the chosen configuration, investors should carefully examine the proposed liquidity windows and applicable notice periods before investing. Paradoxically, a lower redemption frequency — quarterly for example — or a longer notice period of three to six months can often be a sign of more robust liquidity (in terms of volume).

At the other end of the spectrum are funds such as evergreen FCPRs in France, which use redemption caps only in exceptional circumstances. They must therefore be structured differently. They can, for example, integrate pockets of assets with shorter durations, such as private debt, which allows for faster natural amortisation of the portfolio, thus faster liquidity generation. FCPRs can also include pockets of liquid assets, or rely on assets with a secondary market, as some funds of funds do, for example.

Finally, evergreen FCPRs have a more or less long notice period. They are based on an overall approach to portfolio liquidity, designed to cope with shocks. While this structuring may slightly dilute returns, its primary benefit is to strengthen the liquidity promise. The investment philosophy is built around a principle: the manager must offer liquidity without capping redemptions, exceptional circumstances excepted.

Typically, this type of fund must prove to the regulator that it can withstand redemption requests of 40% over a rolling year without resorting to gating. This is why it most often includes a pocket of liquid assets. In return for this greater liquidity, the performance can be diluted compared to a fund that further optimises its exposure to illiquid assets.

Finally, the ELTIF regulation has a strong influence on local regulators’ requirements. There is a trend towards convergence of requirements across formats, particularly regarding the sizing of liquidity pockets in relation to the frequency and/or notice period of redemption windows. This is probably good news for investors, since regulators’ checks are becoming more stringent, thereby creating de facto new European standards.

We have observed liquidity stress on some evergreen private debt funds in the United States. What lesson should European investors learn from this?

Nicolas Audhoui-Darthenay:

Recently, some American evergreen funds invested in private debt have had to cap their redemptions following a surge in exit requests. It should be remembered that their sector allocation was often concentrated in the technology sector, particularly software. These decisions, although in line with the prospectuses and the usual operation model of tender offer funds, may have surprised some investors. This has been the subject of several press articles in the US and Europe.

For investors, this is a reminder that the redemption cap risk is real in the event of herd behaviour or stress on the underlying assets. This episode also highlights the difference in structuring between American and European funds. European evergreen funds are structured under regimes that impose strict consistency between the liquidity profile of the assets and redemption frequency. Mechanisms for limiting redemptions — gates (temporary cap on redemptions), swing pricing (adjustment of net asset values), side-pockets (isolation of difficult-to-sell assets in a separate pocket) — are set out in advance in the prospectus and must be activated gradually.

Since European portfolios are often constructed around the liquidity constraint, their management requires very broad diversification of investments — in terms of number of holdings, geography, industry and vintage (diversifying between recent investments and older ones, whose amortisation is expected sooner). In this way, caps on redemptions remain the exception rather than the rule.

This is a useful reminder: the more diversified portfolios are, the less exposed they are to herd movements triggered by an event affecting a single underlying asset or a specific sector. From this standpoint, funds of funds can help maximise diversification.

Romain de Beco:

Large European asset managers, thanks to their structuring capabilities, can offer innovative solutions that optimally combine the search for yield and robust liquidity. In a still very fragmented European market, a manager’s reputation in its domestic market remains its primary asset. It is crucial when approaching a client base of distributors and retail investors who are still relatively unfamiliar with these products.

Before discussing returns with investors, it is essential to ensure that they clearly understand how the products work, their risks and their liquidity constraints. Distributors are also very attentive to this need for transparency and education, because the promise made to the client must be honoured over time. In this respect, Natixis IM’s teams provide articles and training modules to make the technical aspects of these funds more accessible.

Read important disclosures

How to diversify in a Mag 7 world with private equity

Nitin Gupta, CIO and Managing Partner at Flexstone Partners, explains why private equity allows investors to diversify from the Mag 7.

VIDEO

How the market is killing private equity…and making it stronger

Eric Deram, CEO and Managing Partner at Flexstone Partners, explains where to find value in private equity in a fragmented world.

VIDEO

Real estate: where do we go from here?

Vanessa Roux-Collet, CEO of AEW Europe and Head of France, explores the next trends in real estate, from democratisation to AI impact.

The analyses and opinions mentioned in this document represent the point of view of the referenced author. They are issued as of the indicated date, are subject to change, and should not be interpreted as having any contractual value.

Additional Notes

This material has been provided for information purposes only to investment service providers or other Professional Clients, Qualified or Institutional Investors. Where required by local regulation, this material is only provided upon written request from such investors. 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: Amsterdam WTC, Zuidplein 36, WTC, Tower 1, 4th Floor, 1077XV Amsterdam, 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), Bisschoffsheimlaan 15 Bus 100/037, 1000 Brussels, 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 Latin America: Provided by Natixis Investment Managers International.

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 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.

This document may contain references to copyrights, indexes and trademarks that may not be registered in all jurisdictions. Third party registrations are the property of their respective owners and are not affiliated with Natixis Investment Managers or any of its related or affiliated companies. Such third party owners do not sponsor, endorse or participate in the provision of any Natixis Investment Managers services, funds or other financial products.

The index information contained herein is derived from third parties and is provided on an “as is” basis. The user of this information assumes the entire risk of use of this information. Each of the third party entities involved in compiling, computing or creating index information, disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to 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-80238

Information on Fraud Attempts

Americas

Latin America

United States

United States Offshore

Asia Pacific

Australia

Hong Kong

Japan

Korea

Singapore

Europe

Austria

France

Germany

Italy

Spain

Switzerland

United Kingdom

Location not listed?

International

Private assets: liquidity and diversification, the strengths of the European evergreen model

What are the expectations of retail investors when they choose private asset strategies and what trade-offs do they have to make between flexibility and returns?

What are the main types of private asset funds available to individuals in Europe?

What is an ELTIF fund?

How is liquidity managed in retail private asset funds?

We have observed liquidity stress on some evergreen private debt funds in the United States. What lesson should European investors learn from this?

Subscribe to our newsletter

Related insights