What's Happening?
Morningstar has partnered with PitchBook to introduce a new suite of indices specifically designed for evergreen private market funds. These indices aim to provide investors with benchmarks to evaluate
the performance of non-traded strategies. The Morningstar PitchBook US Evergreen Fund Indexes will cover a range of asset classes, including private equity, private debt, real estate, infrastructure, and multi-asset strategies. As of mid-2025, the US evergreen funds market manages approximately $450 billion in net assets, with expectations to exceed $1 trillion by the end of the decade. This initiative addresses the lack of tools for due diligence and performance comparison in the rapidly growing evergreen fund market.
Why It's Important?
The launch of these indices is significant as it addresses long-standing challenges in the private markets, such as transparency and data timeliness. Investors have historically faced difficulties due to reporting lags and fragmented datasets, which limited their ability to make informed decisions. By providing a rules-based framework for measuring and comparing performance across unlisted evergreen vehicles, Morningstar and PitchBook are enhancing transparency and comparability in the private markets. This development is crucial for investors seeking to navigate the complex and dynamic ecosystem of private markets, offering them better tools to understand and benchmark the performance of evergreen funds.
What's Next?
The introduction of these indices is expected to influence the private market landscape by setting a new standard for transparency and performance measurement. As the market continues to grow, other financial institutions may follow suit, developing similar tools to cater to investor needs. Additionally, the indices could lead to increased investor confidence and participation in evergreen funds, potentially driving further growth in the sector. Stakeholders, including fund managers and investors, will likely monitor the impact of these indices on market dynamics and adjust their strategies accordingly.
Beyond the Headlines
The creation of these indices also highlights a broader trend towards increased transparency and standardization in financial markets. As investors demand more rigorous and consistent performance metrics, financial institutions are compelled to innovate and provide solutions that meet these needs. This shift could lead to more robust regulatory frameworks and industry standards, ultimately benefiting the entire financial ecosystem by fostering trust and accountability.
