b'that global alternative assets would reach $32 trillion inbenefits to their sponsors while offering investors some assets under management by 2030. This includes privateliquidity, and interval fund BDCs. Continued growth and equity, credit, venture capital, real estate, infrastructure,regulatory reforms are likely to be catalysts for more hedge funds and natural resources. According to theproduct innovation. same report, private equity assets under management are projected to approach $11.8 trillion by 2030.New entrants in the private credit and asset It also bears mentioning that, with the advent andmanagement markets: New participants are entering growth of continuation vehicles, private securitiesthe market and sponsoring permanent capital funds, have an extended life and a newfound liquidity. Also,and traditional fund complexes are partnering with continuation funds are yet another factor contributingalternative capital market funds to sponsor evergreen (along with evergreen semi-liquid vehicles) to theor semi-liquid funds. The incentives are such that it is blurring of the demarcation between private marketslikely that many managers will want to approach new and public markets. categories of investors by offering these products on their own or with partners that are experienced Providing retail investors with access to alternativealternative capital providers. Here as well you might say assets: Retail investors are seeking increased accessthat there is a blurring of lines between traditional fund to the private markets. They would like the high returnsproviders and products and alternative capital products often associated with an investment in private assets.and providers. We do not discuss defined outcome Some of the permanent capital alternatives mentionedstrategies, which often rely on the use of derivatives-above provide a vehicle that facilitates exposurebased indices or the use of options and derivatives, to illiquid access along with some opportunity forthat provide equity market exposure for retail investors liquidity. Registered funds, which are subject to theand are further blurring the lines. comprehensive regulatory framework of the 1940 Act in addition, in many instances, to ongoing ExchangeInsurance company participation in the market: Act reporting requirements, offer important investorSponsor platforms have acquired insurance companies. protections, while still making private market returnsOften, a part of their strategy includes using the accessible. There are additional permanent capitalinsurance companys assets as a pool of permanent vehicles, including traded and non-traded REITs, whichcapital that can be allocated to private capital should be added to the array of alternatives. Regulatoryinvestments. Insurance companies that are not affiliated reforms that promote enhanced retail access towith private equity or private capital sponsors also alternative assets will, in turn, lead to increased interesthave become frequent investors in permanent capital in the types of semi-liquid fund alternatives thatvehicles. Insurance companies have increasingly we describe. invested in BDCs or in other permanent capital vehicles, whether through sidecars or through other structures, Evergreen funds spring up: Evergreen vehicles,and this too provides significant additional pools of including perpetual interval funds, tender offer funds,capital, contributing to the sectors growth.and BDCs, continue to grow in number. Some of these are institutional only vehicles, but many are funds thatOn the pages that follow, we provide an overview of are semi-liquid and popular with retail and high neteach of the principal permanent capital vehicles and worth investors. Evergreen private credit strategiesconclude with a discussion of the regulatory reforms have grown significantly; these include direct lending,that also are impacting this sector, as well as share a special situations, opportunistic and distressed lending,perspective on additional regulatory changes that may and mezzanine loan strategies. A PitchBook reportbe on the horizon. predicts that the number of global evergreen funds could increase from $2.7 trillion today to as much as $5.5 trillion in 2029.Melding of vehicle types: Interest in permanent capital vehicles has led to innovation and to hybrid products, such as statutory REITs that provide important Mayer Brown|Introduction 6'