高盛、Evercore等五家投行向PE推介“常青存续基金（forever funds）”，仅处早期探讨阶段

Goldman Sachs Group Inc. and Evercore Inc. are sounding out investors on a fund strategy that could help private equity firms hold onto assets for significantly longer periods.

Bankers at both firms — along with their counterparts at Jefferies Financial Group Inc., Raymond James Financial Inc. and Lazard Inc. — are pitching so-called evergreen continuation vehicles and testing structures that could appeal to select investors, according to people familiar with the matter. Talks are underway with several large private equity shops, the people said.

“We’re at the very early stages of this emergence of permanent capital CV,” Sunaina Sinha Haldea, global head of private capital advisory at Raymond James, said in an interview, declining to discuss specific transactions. “These vehicles will have more unfunded capital to support the growth of the asset, and there is no pressure to exit.”

Private equity managers have struggled to sell assets amid higher borrowing costs and weaker valuations.

In response, they’ve ginned up a variety of ways to delay exits while still returning cash to investors. Continuation funds have become a popular option to extend their control of more promising assets, and some are now being rolled from one continuation vehicle to the next — so-called CV-squared deals — as managers seek even more time to hold investments.

Evergreen continuation vehicles — or “forever funds” — would go even further by removing what has been a key constraint for a manager who wants to maintain an asset for longer: Private equity funds traditionally have fixed lifespans.

Holcombe Green, global head of private capital advisory at Lazard, said he expects the contours of the funds to evolve over time.

“These funds will not have a defined structure because they will be customized,” Green said.

Representatives for Goldman, Evercore and Jefferies declined to comment.

Parking assets in evergreen continuation funds could invite more scrutiny of fund managers’ share of the profits, known as carried interest, as well as investors’ ability to cash out, the people said, asking not to be identified because the deliberations are confidential. Investors may also expect higher revenue and growth potential, they said.

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Continuation funds accounted for just under 50% of the $121 billion of secondary transactions in this year’s first half, according to an Evercore report.

Such vehicles typically have five-year lifespans, with two potential annual extensions. In their new avatar, managers could roll existing assets into CVs with lives of 10 to 15 years.

Market participants are still discussing just how investors who want to exit will be able to do so. Possibilities include distributions from underlying assets or money from new investors, some of the people said.

Bankers are also discussing options such as allowing investors to tender their shares or offer staples, where an existing investor can cash out in exchange for committing capital to a new fund, people said.