What's Happening?
Morningstar and Pitchbook have announced the launch of a suite of evergreen private market fund indexes designed to benchmark and track the performance of nontraded, semi-liquid funds. These indexes, set to be released in the first quarter of 2026, will
combine private assets with regular liquidity and periodic net asset value pricing. The initiative aims to bring greater transparency, consistency, and comparability to private equity, private credit, real estate, infrastructure, and multi-asset strategies. This development follows Morningstar's recent expansion of its fund classification system, which introduced new categories to aid investors in peer comparisons and due diligence as private and public markets converge.
Why It's Important?
The introduction of these indexes is significant as it addresses the growing need for transparency and comparability in the rapidly expanding evergreen fund market. As of mid-2025, U.S. evergreen funds held approximately $450 billion in net assets, a substantial increase from $250 billion in 2022, with projections to surpass $1 trillion by 2030. By providing performance comparisons for various unlisted, semi-liquid investment vehicles, the indexes will help investors conduct due diligence and make informed decisions. This move is expected to enhance portfolio construction across asset classes and support the integration of private market assets into defined contribution plans, as directed by President Trump's executive order.
What's Next?
The release of the Morningstar PitchBook US Evergreen Fund Indexes is scheduled for the first quarter of 2026. During this period, the Secretary of Labor is expected to clarify the Department of Labor's position on alternative assets and the fiduciary process associated with offering asset allocation funds containing investments in alternative assets under ERISA. This clarification could lead to new rules or guidance for including funds holding private market assets in defined contribution plans, potentially influencing investment strategies and regulatory frameworks in the U.S. financial sector.
Beyond the Headlines
The launch of these indexes may have broader implications for the financial industry, particularly in terms of regulatory oversight and investor protection. As private markets continue to grow, the need for standardized benchmarks and transparency becomes increasingly critical. This initiative could set a precedent for other financial institutions to develop similar tools, fostering a more robust and accountable investment environment. Additionally, the focus on evergreen funds highlights the evolving nature of investment strategies, which may lead to shifts in how investors approach asset allocation and risk management.
