Structuring the future of health | McDermott

McDermott Will & Schulte, a global law firm

INSIGHT

The insider’s guide 
to evergreen funds

Read time: 3 min

Key takeaways

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Lately, all eyes seem to be on evergreen funds. Among private credit funds, they’ve emerged as one of the hottest fund formats in recent years – but despite their growing popularity, these funds can be complex, and their mechanics are often misunderstood.
If you have questions, you’re in the right place. Let’s demystify this increasingly popular fund structure.

Market activity. Participants expressed mixed-optimism at HPE NYC. Forty-six percent of attendees polled believed deal activity would be “about the same” over the next 12 months, while 42% believed it will improve. Panelists leaned more optimistic as they pointed to growing market activity over the last year and an increase in the deal pipeline through 2025.
Obstacles to healthcare PE transactions. Both panelists and attendees identified the lingering buyer-seller valuation gap as a major barrier facing Healthcare PE investors; 55% of attendees pointed to that valuation disconnect as the biggest challenge to successful deal executions. According to panelists, the gap is more pronounced in sectors where the lack of recent trades has made it particularly difficult for buyers and sellers to agree on valuations.
Pharmaceuticals. Panelists addressed concerns over margin erosion and possible disruptions to pharmaceutical accessibility. The pharmaceutical industry is adjusting to potential changes in patient access to drugs, including a push to direct-to-consumer channels. That movement has begun and continues to trend.