Neuberger Berman’s alternatives chief warns that aggressive fundraising from wealthy individuals and semi-liquid ‘evergreen’ funds may sow the seeds for reputational blowback across private markets

Private equity’s long courtship of institutional investors is giving way to a full-throated pursuit of wealthy individuals. That pivot—powered by semi-liquid “evergreen” funds, lower minimums and digital distribution—has turbocharged fee-bearing assets for some of the industry’s largest listed managers. But it is also prompting warnings from veterans who fear the flood of fresh money could lead to poor decisions that damage the sector’s standing.

Tony Tutrone, global head of NB Alternatives at Neuberger Berman, is among those sounding the alarm. In an interview this month, he cautioned that managers who have “raked in cash” from high-net-worth clients face a heightened risk of slip-ups as they scale. “There will be some bad stories which will reflect poorly on the entire industry,” he said, urging discipline as private markets “retailize.” His message lands at a delicate moment for buyout groups, which are grappling with higher financing costs, slower exits and public-market scrutiny of their growth-at-all-costs playbooks.

Evergreen funds sit at the center of the debate. These open-ended vehicles take money continuously and permit periodic redemptions, promising investors faster deployment and access to private-market return streams without committing for a decade. For managers—especially those listed in New York—the allure is obvious: a single product can gather assets indefinitely and throw off steady management fees. That model helped push evergreen strategies from niche to mainstream over the past two years as Blackstone, KKR and others leaned in. Analysts estimate the category now accounts for a mid-single-digit share of private markets assets and could multiply over the next decade if current growth rates persist.

The catch is that semi-liquid structures create new pressures. Capital inflows arrive before deals are sourced, forcing managers to put money to work quickly or accept cash drag that imperils performance targets. Meanwhile, the promise of periodic liquidity must be honored through lines of credit, liquid sleeves or secondary sales—tools that can work well in benign markets but become stress points when exits slow. Add in the cadence of quarterly earnings for listed platforms and the temptation to prioritize asset accumulation over underwriting discipline becomes acute.

Warnings about this balance are not academic. Commentary from market observers this year has flagged the risk that the evergreen boom becomes a “risky money tree” if the fee engine outpaces realized returns. Industry data further suggest that while investor appetite remains healthy, new evergreen launches slowed in 2025 versus last year—an indication that sponsors are moving from experimentation to a more selective, operationally intensive phase. For allocators, that shift underscores the need to differentiate between asset gatherers and true stewards of capital.

At the same time, the retailization trend is expanding beyond the ultra-wealthy into workplace pensions. In the UK, insurers and asset managers are retooling default defined-contribution strategies to include private assets, encouraged by policymakers seeking to channel long-term capital into growth companies and infrastructure. Aviva, for example, unveiled a new default option this week that increases exposure to private markets and taps a roster of specialist managers—including Neuberger Berman—to build diversified sleeves spans across private equity, credit, real assets and infrastructure. The move puts further momentum behind a distribution channel that could funnel billions into private markets in the coming years.

Neuberger Berman’s own stance captures the industry’s ambivalence. Tutrone argues evergreen vehicles can be “a net positive” when designed with strong guardrails: pacing policies that limit deployment in hot markets, independent valuation practices, hard caps on redemption promises and clear disclosures about liquidity management. He also says the firm will continue to back listed managers where conflicts are well managed and governance is robust. That pragmatism reflects a broader reality: democratized private-market access is here to stay, and the question is less whether it will grow than how it will be governed.

In the background, the plumbing of private markets is still adjusting to a higher-rate world. Exit volumes have recovered from the 2023 trough but remain uneven by sector and region. Secondaries have been a bright spot, with GP-led deals and continuation funds helping to bridge liquidity needs for limited partners and extend ownership of prize assets—an area where Neuberger has been an active player. Yet even there, scale introduces complexity: larger vehicles can take on chunkier deals, but concentration risk, valuation subjectivity and alignment with legacy LPs demand painstaking structuring.

For wealthy investors—many of whom are new to private markets—the dispersion in product quality is wide. Fee layers, tax treatment, valuation cadence and liquidity terms deserve as much attention as headline target returns. In evergreen private equity specifically, the best-designed funds tend to combine: i) a seasoned sourcing engine with real sector specialization; ii) tight pacing discipline; iii) a credible plan for redemptions that avoids forced selling; and iv) a willingness to close to new money when opportunity sets thin. Products that compromise on any of these elements simply to stay in growth mode risk becoming tomorrow’s cautionary tales.

For managers, the reputational stakes are real. Private equity has enjoyed a long run as the preferred problem-solver for companies and an indispensable partner for institutional asset owners. That status can erode quickly if retail investors experience mismatched expectations, gated withdrawals or conspicuous underperformance. Transparent reporting, conservative marketing and alignment on fees—especially around performance compensation and expense pass-throughs—will matter more than ever as the investor base broadens. Firms that resist the urge to maximize short-term AUM and instead prioritize durable compounding should be better positioned when the cycle turns.

Tutrone’s warning is therefore less a rebuke of innovation than a reminder that private markets’ social license is fragile. If the next leg of growth is to come from households and pension savers rather than global pensions and endowments, the industry must show it can scale responsibly. That means treating evergreen funds as a tool, not a business model; managing conflicts inherent in public ownership with clear, auditable processes; and building liquidity frameworks that can withstand stress, not just marketing decks. Otherwise, the “bad stories” he predicts will not only dent individual brands—they will invite broader skepticism about whether private equity deserves its growing reach into personal balance sheets.

For now, the opportunity remains vast. Demand for differentiated, less correlated return streams is strong; listed platforms with high-quality deal engines are proving they can deliver; and policy efforts in multiple markets are lowering barriers to participation. The next 12 months will test whether the sector can match that opportunity with restraint. The prize for getting it right is a deeper, more resilient capital base. The penalty for getting it wrong is a reputational setback that could take years to repair.

Sources (selected):
• Financial Times, “Big private equity groups risk harming sector’s standing, warns Neuberger Berman,” September 2025.
• Reuters Breakingviews, “Buyout barons’ evergreen rush is risky money tree,” February 12, 2025.
• S&P Global Market Intelligence, evergreen fund launch trends, April 25, 2025.
• Citywire, “Blackstone gets mega revenue bump on evergreen gains,” July 24, 2025.
• Bloomberg, “Aviva ratchets up private markets exposure in default pensions,” September 30, 2025.
• McKinsey & Company, “Global Private Markets Report 2025,” May 2025.