Perpetual and semi-liquid vehicles that raise and return capital continuously, with the subscription, redemption, and valuation mechanics that make an open-ended fund work for sponsors and investors alike.
An evergreen fund re-runs its hardest tests every dealing day. The ERISA plan-asset test asks after each admission whether benefit plan investors hold 25 percent or more of any class, with the denominator moving on every redemption, so a fund that takes pension capital needs a monitor and a right to refuse or compel. The Form D a closed-end fund files once is amended annually while the offering stays open.
Liquidity is a promise the documents make and the portfolio keeps. A registered interval fund promises repurchases of 5 to 25 percent of its shares every three, six or twelve months under Rule 23c-3; a private evergreen fund promises whatever its gates, notice periods and lock-ups say. AIFMD II now requires an EU open-ended fund to pick at least two liquidity tools from a fixed list and publish when they apply.
Valuation is the fairness mechanism, since everyone deals at one NAV, and the custody rule's audit exception means audited statements within 120 days of year end. We draft these vehicles for sponsors, read them for investors, and have represented clients in matters before the SEC and the CFTC.
Vehicle selection and structuring for funds without a fixed term, meaning perpetual evergreen vehicles and semi-liquid structures that suit the strategy, the investor base, and the liquidity the portfolio can realistically support.
The drafting that lets capital move continuously, covering periodic subscription windows, redemption schedules, notice periods, and the pricing that ties every entry and exit to net asset value.
Gates, holdbacks, side pockets, lock-up periods, and suspension rights, the defensive machinery of an open-ended fund, drafted so redemption demand can be managed without forcing the portfolio.
Valuation policy for funds priced off NAV, including methodology, pricing dates and frequency, the administrator's role, independent valuation, and the treatment of illiquid and hard-to-value assets.
Maintaining the private-placement exemption across an ongoing raise, marketing and solicitation rules over time, and the investment-management compliance obligations a continuously offered fund carries.
Fees, hurdles, and crystallization in a perpetual setting, advisory-committee and conflicts terms, and the structuring of conversions between closed-end and evergreen vehicles where a strategy outgrows its original term.
An open-ended fund promises redemptions, and the portfolio has to deliver them. The redemption schedule, the gates, and the underlying assets have to be designed together, because a liquidity mismatch is the failure mode of the structure.
Because investors enter and exit at NAV, an inaccurate valuation transfers value between them. The methodology, the pricing frequency, and the handling of illiquid assets are fairness questions as much as accounting ones.
A fund offering a year after its first sale amends its Form D annually, and a continuous private placement has to keep its purchasers accredited and its solicitation inside Rule 506(b), or verified under 506(c), on every subscription date. A deck that goes public in year three breaks an exemption claimed in year one.
Gates, holdbacks, side pockets, and suspension rights exist so a wave of redemptions does not force a fire sale that harms the investors who stay. They are drafted in calm conditions to work in stressed ones.
Without a final waterfall, carried interest and incentive fees have to crystallize on a different logic. The fee mechanics that fit a closed-end term cannot be carried over unchanged to a fund that never ends.
A Section 3(c)(1) fund may have no more than 100 beneficial owners, counted continuously; a 3(c)(7) fund admits only qualified purchasers, with $5 million in investments for an individual and $25 million for an entity. A private-wealth vehicle hits the first ceiling fast, so the exemption is chosen for its size in year ten.
Before a term sheet exists, we stress the strategy against the calendar: how fast the portfolio converts to cash, and therefore what redemption frequency, notice period, and lock-up the vehicle can honestly promise. The structure, perpetual, semi-liquid, or tender-based, is chosen to fit that answer, whatever the marketing deck would prefer.
The LPA or company documents are written as operating machinery: subscription windows, NAV-based entry and exit pricing, gates and holdbacks, side pockets, and suspension rights, each with defined triggers. Every clause is drafted for the redemption date it will one day have to survive.
The valuation policy is fixed, covering methodology, pricing dates, the administrator's role, and independent marks for hard-to-value assets, because entering, exiting, and remaining investors all transact off the same NAV. The continuous-offering exemption analysis is set, and the fund opens its first window.
The matter never closes; it cycles. Each subscription and redemption date, fee crystallization, and amendment runs through the same counsel, and when redemption demand outruns liquidity, the gates drafted at stage two are invoked exactly as written, protecting the portfolio without breaking faith with investors.
A closed-end fund is judged at exit. An evergreen fund is judged on every redemption date it survives.
An evergreen or open-ended fund is a vehicle without a fixed term that admits new investors and, in most cases, allows redemptions on a periodic basis. Capital is raised and returned continuously against net asset value, which lets a sponsor keep deploying through cycles from a single vehicle, and which shifts the legal questions toward subscription mechanics, liquidity terms, and ongoing valuation.
A closed-end fund raises a fixed pool during a defined commitment period, invests, harvests, and winds up on a set term. An evergreen fund has no fixed end date: it offers interests on a rolling basis, prices subscriptions and redemptions off net asset value, and recycles capital rather than returning it on a final distribution. The trade-off is liquidity management. An evergreen structure has to fund redemptions without forcing the portfolio, a problem closed-end funds never have to solve.
Liquidity is engineered into the documents. Open-ended funds typically offer redemptions on a periodic schedule, monthly, quarterly, or less often, subject to notice periods, lock-ups, and tools such as gates, holdbacks, side pockets, and suspension rights that protect remaining investors when redemption demand outruns available liquidity. We draft those mechanics so the fund can meet redemptions in ordinary conditions and defend the portfolio in stressed ones.
Because investors come and go at NAV, valuation sits at the center of the structure. The offering and governance documents have to fix a valuation methodology, a pricing date and frequency, the role of the administrator and any independent valuation, and how illiquid or hard-to-value assets are treated. Getting this right is what makes subscription and redemption pricing fair between entering, exiting, and remaining investors.
Three recur. The private-placement exemption is tested on every subscription date, so the Form D is amended annually and each purchaser is checked for accredited or qualified-purchaser status at admission. The ERISA plan-asset test is run after each admission, since benefit plan investors crossing 25 percent of any class would make the fund's assets plan assets and the manager a fiduciary. And the adviser's own obligations continue: Form PF reporting, the custody rule's 120-day audit delivery, and a valuation policy the SEC can examine. Where an examination has turned adversarial, we have represented managers in matters before the SEC and the CFTC.
Yes, in two legal forms. A registered interval or tender-offer fund can be sold to the public; Rule 23c-3 fixes an interval fund's repurchase offers at 5 to 25 percent of its shares every three, six or twelve months, and the Investment Company Act governs its borrowing and valuation. A private evergreen fund stays within Section 3(c)(1) or 3(c)(7), which caps the investor base at 100 beneficial owners or limits it to qualified purchasers, and offers only the liquidity its gates and notice periods allow. In the second form diligence turns on suitability, fee transparency and the gap between the liquidity promised and the liquidity the portfolio can produce.
Formation and launch counsel for venture sponsors, with vehicle selection, limited partnership agreements, and the terms that fit an early-stage strategy and its investor base.
Explore →Closed-end and growth fund structuring, including commitment periods, capital calls, waterfalls, and the LPA and side-letter terms that set the economics of a buyout or growth strategy.
Explore →Fund formation for real-estate sponsors, covering vehicle and tax architecture, investor structuring, and the governance and liquidity terms that suit a property strategy.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
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