KKR's Alisa Wood Reveals Private Equity's Evergreen Evolution

In Brief:

Alisa Wood, KKR partner and co-CEO of KKR Private Equity Conglomerate LLC, discusses the firm's pioneering work in evergreen investment structures during an interview with Michael Sidgmore on the Alt Goes Mainstream Podcast. With over 20 years at the firm, Wood explains how KKR has adapted to meet growing demand for private market access among individual investors while managing the operational complexities of evergreen vehicles. She highlights how these structures solve key friction points for investors seeking private equity exposure, while emphasizing that despite $190 trillion in individual wealth globally, only 1.4% is currently allocated to alternatives.

Big Picture Drivers:

• Wealth Shift: Capital increasingly moving from institutions to individual investors

• Market Evolution: 50% fewer public companies over 25 years, with remaining companies 5x larger

• Operational Complexity: Successful evergreen structures require sophisticated liquidity management

• Deal Flow: Continuous capital raising demands consistent investment opportunities

Key Topics Covered:

• Evergreen Structures: How KKR manages open-ended perpetual investment vehicles

• Wealth Channel: Building community and education with individual investors

• Deal Sourcing: How evergreens enable longer partnerships with family businesses

• Portfolio Construction: The "40-30-30" framework beyond traditional 60-40

Key Insights:

• Culture First: KKR's collaborative culture enables sharing deals across vehicles

• Operational Demands: Managing evergreens requires specialized teams handling cash management and FX

• Education Gap: Individual investors need more understanding of private markets' role

• Industry Responsibility: Poor management by any firm hurts the entire evergreen category

By The Numbers:

• $100+ Billion: KKR's assets from the Wealth Channel

• $18 Billion: Assets in KKR's K-Series funds

• 1.4%: Portion of $190 trillion in individual wealth currently in alternatives

• 1,400-2,000 bps: Return dispersion between top and third quartile private market managers

Memorable Quotes:

• "To make an evergreen strategy successful, you need to be able to manage the operational complexity." - Alisa Wood (discussing the multivariable challenges of managing capital inflows, redemptions, recycling, and deal flow)

• "There are more private equity funds in the US than there are McDonald's." - Alisa Wood (illustrating the overwhelming number of choices investors face when selecting managers)

• "If you invest in Evergreen, you need to almost forget about it. It's not the carrot you pull out of the ground once a month to check on the NAV." - Alisa Wood (explaining how investors need to adopt a truly long-term mindset that runs counter to human nature)

• "This isn't about a cost saving. You don't cut your way to greatness in the companies we buy. You grow them." - Alisa Wood (highlighting KKR's growth-oriented investment approach where two-thirds of returns come from improving company performance)

The Wrap:

Wood believes the industry is just at the "tip of the iceberg" in democratizing private markets, with the 401(k) space representing the next frontier. The ultimate goal extends beyond innovation for its own sake—it's about creating accessible investment structures that help solve retirement challenges for millions of people who currently lack access to the consistent returns that institutional investors have long enjoyed through private markets.