The key innovation of evergreen funds for individual investors isn't just liquidity, but the upfront, fully-funded structure. This removes the operational complexity of managing capital calls and distributions—a major historical barrier for even wealthy individuals who found the process too complicated.

When private equity firms begin marketing to retail investors, it's less about sharing wealth and more a sign of distress. This pivot often occurs when institutional backers demand returns and raising new capital becomes difficult, forcing firms to tap the public for liquidity.

While fears of retail investors gambling on venture capital exist, the primary growth in retail alternatives is in yield-oriented strategies like private credit and infrastructure. These products meet the demand for high current income and lower volatility, especially for those in or near retirement, making them a more logical first step.

Alternative asset managers cannot simply create a product and expect private wealth channels to 'fill the bucket.' Success requires a significant, dedicated infrastructure for wholesaling, marketing, and advisor education across various dealer channels—a resource-intensive commitment that serves as a high barrier to entry.

Serving thousands of individual investors requires a huge investment in "nuts and bolts" infrastructure for administration, processing, and reporting. This operational complexity and cost, not client-facing apps, is the primary hurdle for GPs entering the retail space, moving from analog processes to complex digital systems.

Instead of viewing the flood of private wealth as competition for deals, savvy institutional investors can capitalize on it. Opportunities exist to seed new retail-focused vehicles to gain economics, buy GP stakes in managers entering the wealth channel, or use new evergreen funds as a source of secondary market liquidity.

Before GPs can successfully tap into the retail market, they must recognize the immense operational costs. Managing, reporting for, and administering funds with thousands of small investors has a high break-even point. Without the ability to achieve significant scale, the economics of these products are unworkable.

Contrary to the traditional focus on institutional investors, allocating a significant portion of an IPO to retail investors creates a loyal shareholder base. This "retail following" can result in higher valuation multiples and sustained brand advocacy, turning customers into long-term owners and a strategic asset.

Though a small portion of the market's NAV, retail investor participation is growing at 50% annually. This new, consistent capital flow is a significant structural change, increasing overall market liquidity and enabling more transactions.