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.

Instead of creating separate, more liquid products for the retail market, Premira targets sophisticated ultra-high-net-worth clients through private banks. These clients invest in the same closed-end funds as institutions, aligning interests and simplifying firm strategy.

To solve the critical illiquidity problem for individual investors, Goldman Sachs operates a proprietary, quarterly secondary market developed over 20 years. This platform allows its wealth clients to list and sell their alternative investment positions, transacting over a billion dollars in NAV annually and providing a crucial liquidity solution.

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.

For the sophisticated custom target-date funds that will be early adopters, private credit is the easiest first step. Unlike private equity, some private credit products can already be marked daily. This operational readiness, combined with liquidity from distributions, makes it the path of least resistance.

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.

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.