Evergreen Funds and the Potential Misuse of Secondaries

December 16, 2025

In recent years, and especially during the early stages of fundraising, some private equity evergreen funds have reported strikingly high returns in an environment of relatively muted returns for private equity overall. These results, on the surface, may strike a skeptical observer as too good to be true. Upon closer examination, much of this apparent outperformance stems not from genuine investment success but from accounting practices involving secondary transactions being used to enhance short-term performance numbers.

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