StepStone Private Wealth president of distribution Neil Menard on building trust, client education and the case for gaining private-market exposure through ‘evergreen’ funds
Where – and why – are you anticipating demand or fund-flows from UK-based wealth managers and their clients over the next 12 months?
Demand for private markets is accelerating quickly. According to research by Novatingo, in the next three to five years, private banks and wealth managers expect allocations to ‘evergreen’ funds could reach up to 90% of total private asset investments.
Private equity is not new to our client base – many have been investing via investment trusts for years – but by adding evergreen strategies you remove the variability of discounts to NAV and can also invest with significant scale in mind. And compared with traditional institutional vehicles, these funds remove barriers to entry, such as high minimum commitments and long lock-up periods, that historically made these investments hard to access.
You can read more from Stepstone on evergreen private markets funds here
In the UK, private equity is still broadly perceived by the wealth segment as investing in private companies at the forefront of technological development and other industry innovation. As such, we are seeing a significant uptick in interest for venture capital and growth equity managers through our evergreen StepStone Private Venture and Growth Fund, particularly since this is not something the wider market currently caters for in an evergreen format, with our scale.
Income is also incredibly important in the UK market. We are starting to see this reflected in searches for private credit strategies among wealth managers due to the significant yields that can be achieved.
How are you planning to address and serve that interest?
The key difference in our approach is we are not creating watered-down versions for private wealth. We provide wealth clients access to the same institutional-grade platform we have built for some of the world’s largest investors over the last 20 years. That means the same origination, the same investment teams and the same global platform.
With diversification being a key priority for this segment, our evergreen funds feature up to – and sometimes over 100 general partners (GPs) – spanning different geographies, sectors and risk profiles, and opportunities across co-investments, secondaries and direct investments in a single fund. By combining multiple managers and counterparties in a single vehicle, wealth clients avoid the concentration and timing risks of single-GP funds.
The breadth of the portfolio, alongside a focus on shorter-duration transactions and reduced leverage, helps smooth cashflows and lowers distribution risk, making returns more consistent and predictable. This approach also allows us to manage our liquidity more efficiently, which we know is among the primary focus areas for our clients and it is where we always start when it comes to our evergreen portfolio management.
As a business, how do you define ‘alternative’ and ‘private’ assets and to what extent should asset managers be looking to service investor demand here?
Although we do not like the term ‘alternative investments’, we define them as any asset class that sits outside traditional public equities, bonds and cash, whereas ‘private market assets’ are a subset of alternative investments. The latter describes investments in non-publicly traded companies or assets. Broadly speaking, the main asset classes include private equity and venture capital, private debt, infrastructure and real estate.
Although access to private markets for non-institutional investors is not an entirely new concept, it is fair to say 2025 has been a major turning point. Driven by significant demand by investors – particularly within the wealth segment – we have seen a shift in focus from GPs, with the launch of semi-liquid evergreen funds and related strategies, bringing down historic barriers to entry such as investment minimums and enhanced liquidity conditions.
Yet it is not just about access – it is also about allocation of investments. At StepStone, we offer individuals the opportunity to access investments in the same deals as institutional investors, at the same price, at the same time. This is something we are seeing in the leading evergreen funds, supported by pro rata allocation policies, which mitigates the risk of adverse selection, allowing clients within an evergreen fund to invest alongside institutions across the globe.
‘ESG is dead – long live ESG 2.0’ – your thoughts as a distributor, please?
While there has been a clear pushback on ESG from a political standpoint in the US, we do not see practice in retreat. GPs are navigating the current environment by focusing on quantifying the value created by ESG initiatives, such as the work they do on decarbonisation, at portfolio companies and assets.
The market should welcome constructive challenges to ESG practices if it leads to better outcomes, given that the integration of certain ESG factors can be financially material – and clients expect GPs to use all available value-creation levers, including those related to ESG. It is therefore in practitioners’ best interest to understand how to integrate them most effectively.
GPs are also focusing more on better risk management, such as physical climate risk evaluation and how that gets incorporated in underwriting, given the increasing risk from hazards such as flooding and wildfire.
What drives your approach to client communication? And is there a case for focusing on attracting the ‘right’ type of client?
Our approach to client communication is driven by clarity, transparency and a recognition that widening access to private markets brings new responsibilities for advisers. Semi-liquid and evergreen structures call for more thoughtful due diligence and clearer explanations than many traditional strategies.
Even when an asset class such as private credit offers more suitable liquidity features within the private markets universe, advisers still need to assess quality, default risk, redemption terms and governance – and communicate those nuances in a way that helps less experienced retail investors make informed decisions.
At the same time, I believe there is a case for focusing on attracting the ‘right’ type of client – those whose goals, liquidity needs and risk tolerance align with the characteristics of these products. Suitability remains paramount. Not every client will be comfortable with reduced liquidity or the trade-offs associated with private-market exposure. Matching fund features with client objectives – and being transparent about administration, fees, asset quality and historical default rates – is essential to building long-term trust.
This is why solutions need to be designed with transparency and investor protection at the top of mind. Regular valuations, detailed reporting and tight risk controls form the core of the approach. Compared with more concentrated products, the strategy emphasises broader diversification and lower leverage, reflecting the same level of care and oversight expected by institutional investors.
Clear communication is also strengthened by access to robust data. StepStone’s SPI platform, for example, gives advisers and clients confidence decisions are informed by extensive, real-time intelligence. This is then combined with investor education through dedicated investor academies, consistent updates and straightforward onboarding. These tools help demystify private markets without compromising quality or risk management.
Ultimately, the right clients are those who value transparency, understand the trade-offs involved and seek long-term, risk-aware access to high-quality private markets opportunities. Effective communication helps ensure expectations are aligned, risks are understood and client relationships are built on trust – in other words, education, education and more education for our clients.
Outside of work, what is the strangest thing you have ever seen or done?
One of the strangest experiences I have ever had took place in Belize, in a cave they call ‘ATM’ for short. I had to swim into the cave, then hike and swim for about two miles until I reached a rocky outcrop, leading to a Mayan temple.
Once in the temple, I climbed a very rickety ladder to a sacrificial altar, where the ancient remains of some who were sacrificed remained. The climate conditions in the cave meant there were several well-preserved skeletons and pottery as well.
May we have two book recommendations, please – ideally, one with an investment connection?
First is Endurance, by Daniel Bryce, which is about Shackleton’s incredible voyage. And then The Power Law, by Sebastian Mallaby, which is about venture capital and the making of the new future. It is very intriguing.
Gazing into your crystal ball, what does the asset management sector look like 10 years from now?
I believe we are still in the early phases of private market allocations for private wealth clients. The industry has seen the institutionalisation of ‘retail private markets’ and I would expect the trend to continue and gain momentum. I also expect the number of funds to grow, making the due-diligence process for these funds even more critical.
Evergreen AUM could exceed $1.1tn (£800,000) by 2029, driven by demand for flexible, semi-liquid structures and, more importantly, enhanced diversification.
Over the next decade, I expect AUM to quadruple or more, with evergreen structures becoming a core component of private wealth portfolios. Returns are expected to be competitive with closed-end funds – but with nuanced liquidity and governance risks – while product innovation around semi-liquid structures and tax-efficient solutions will continue.
We also believe multi-asset evergreen funds are poised for rapid growth and mainstream adoption, driven by investor demand for flexibility and continuous exposure. These funds offer liquidity and compounding benefits, while also presenting diversified exposure to private equity, credit and real assets within one fund.
“Matching fund features with client objectives – and being transparent about administration, fees, asset quality and historical default rates – is essential to building long-term trust.
