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.

To combat the misconception of easy access to cash, Goldman Sachs has internally banned the common industry term "semi-liquid" for its alternative funds. This linguistic shift is a deliberate risk management strategy to underscore that while these products have liquidity features, they are fundamentally illiquid and access to capital is never guaranteed.

For moderate-risk, ultra-high-net-worth clients, Goldman Sachs advocates a surprisingly high 27% portfolio allocation to alternatives. The main challenge is implementation, so the firm uses proprietary "commitment planners" to help clients methodically invest capital annually, ensuring diversification across vintage years, strategies, and managers.

The traditional IPO exit is being replaced by a perpetual secondary market for elite private companies. This new paradigm provides liquidity for investors and employees without the high costs and regulatory burdens of going public. This shift fundamentally alters the venture capital lifecycle, enabling longer private holding periods.

Goldman Sachs is divesting consumer-facing businesses like Marcus and its credit card to refocus on high-margin corporate advisory. Its stock is at an all-time high, validating a strategy where earning a small percentage (e.g., 0.2%) on multi-billion dollar transactions is far more profitable than serving millions of smaller retail customers.

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.

While client education is important, Goldman Sachs identifies financial advisors as the primary bottleneck for growth. Many advisors outside the ultra-high-net-worth space lack knowledge on alternatives, making comprehensive advisor education paramount for broader market penetration and successful product distribution.

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.