Single vs. Multi-Manager: What's Inside Evergreen PE Strategies?

What's New

KKR's recent report "What's in Your Evergreen Private Equity Strategy?" reveals critical differences between single-manager and multi-manager evergreen funds as these vehicles proliferate across the private markets landscape.

Why It Matters

With manager selection driving up to 14% performance differential, understanding an evergreen fund's structure now requires deeper evaluation of control mechanisms, fee layers, and how underlying investments are sourced and managed.

Big Picture Drivers

• Exposure varies significantly, with some vehicles offering pure private equity while others blend secondaries or multiple asset classes.

• Control determines outcomes, with single-manager strategies having direct influence over portfolio companies versus multi-manager's outsourced approach.

• Access to deal flow differs dramatically, with single-manager vehicles often receiving priority allocation to their own transactions.

• Valuation methodologies create complexity in multi-manager structures where competing approaches must be reconciled.

• Reinvestment capabilities influence portfolio construction, with single-managers having better visibility into deal timing and exit horizons.

By The Numbers

• 14% higher returns historically earned by top-performing managers versus bottom-quartile performers

• 1 layer of fees in single-manager strategies versus potential double-layer in multi-manager vehicles

• 100+ underlying companies typically found in single-manager pure-play strategies

• 20+ years of consistent valuation methodology employed by KKR for private equity investments

Key Trends to Watch

• Prioritize diligence beyond manager selection to evaluate the structural elements of evergreen vehicles.

• Examine diversification trade-offs between concentrated single-manager exposure versus index-like multi-manager portfolios.

• Question access parameters to understand if evergreen managers participate exclusively alongside institutional pools or invest in separate "white space" deals.

• Monitor performance attribution in secondaries-heavy vehicles where up-front discounts drive returns.

The Wrap

Control emerges as the decisive factor in driving private equity outcomes, with KKR positioning single-manager, pure-play strategies as most effective for investors seeking the full potential of long-term capital appreciation in private markets.

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