What's Happening?
Morningstar, Inc., a prominent provider of independent investment insights, has announced the launch of the Morningstar PitchBook US Evergreen Fund Indexes. Scheduled for release in the first quarter of 2026,
these indexes aim to provide comprehensive benchmarks for nontraded 'semiliquid' or 'evergreen' funds. The suite will cover multiple asset classes, including private equity, private debt, real estate, infrastructure, and multi-asset strategies. This initiative seeks to enhance transparency and comparability in private markets, offering investors a data-driven perspective on evergreen fund performance relative to public market alternatives. Sanjay Arya, head of index innovation at Morningstar Indexes, emphasized the importance of these tools in addressing the lack of consistent performance comparison for evergreen funds, which have rapidly grown in popularity.
Why It's Important?
The introduction of the Morningstar PitchBook US Evergreen Fund Indexes is significant as it addresses a critical gap in the investment landscape. Evergreen funds, which blend access to private assets with periodic liquidity, have become one of the fastest-growing segments in private markets. As of mid-2025, U.S. evergreen funds managed approximately $450 billion in net assets, with projections to exceed $1 trillion by the decade's end. This growth reflects investors' increasing demand for diversification and private market exposure. By providing standardized benchmarks, Morningstar and PitchBook are facilitating better due diligence and performance comparison, which could lead to more informed investment decisions and greater investor confidence in private market strategies.
What's Next?
The launch of the Morningstar PitchBook US Evergreen Fund Indexes is expected to drive further innovation and transparency in private markets. As investors gain access to more reliable performance data, there may be increased interest in evergreen funds, potentially accelerating their growth. Additionally, the collaboration between Morningstar and PitchBook could lead to the development of more advanced tools and insights for navigating the convergence of public and private markets. Stakeholders, including wealth managers and institutional investors, are likely to monitor the impact of these indexes closely, assessing their utility in portfolio construction and risk management.
Beyond the Headlines
The rise of evergreen funds and the introduction of comprehensive indexes highlight a broader trend towards the democratization of private market investments. As these funds become more accessible to a wider range of investors, there may be ethical and regulatory considerations regarding transparency and investor protection. The evolving landscape could also prompt discussions on the role of private markets in economic growth and the potential implications for traditional investment vehicles.
