Family offices are expected to help drive a four-fold global growth in the use of evergreen funds investing in private equity and credit to nearly $AU65 trillion over the next decade, according to Hamilton Lane, a US-based alternative investment company with about $AU1.6 trillion under management and supervision.

• The funds, which account for about five per cent of private market allocations, are expected to grow at an annual rate of 30 per cent, or nearly three times the current annual growth, according to its analysis.
  
  Hamilton Lane says $1 invested for 10 years in private equity would have generated a return of $3.96 compared with $3.51 in the S&P 500 index and about $2.13 in private credit. 
  
  “Performance and diversification are driving demand,” says Scott Thomas (pictured), Hamilton Lane’s head of private wealth for Australia. Private equity has under performed over the past 12 months.
  
  Hartley Rogers, executive co-chairman, says there have been 415 evergreen funds launched in the seven years to 2023 as performance topped global listed market benchmarks.
  
  Evergreen funds are designed to operate indefinitely, unlike venture capital or private equity funds that have a set term, which means they can continuously recycle capital and reinvest profits.
  
  Their perpetual structure can complement the long-term, inter-generational horizon of family offices because they allow for ongoing capital contributions and redemptions that can better suit cash-flow requirements.
  
  Family offices are a private wealth management operation for a high-net-wealth individual or family that manages financial, investment, legal, tax, estate and philanthropic affairs.
  
  According to the consultancy KPMG, there are about 2,000 family offices in Australia, a 150 per cent increase in the past decade. They are estimated to manage around $AU500 billion.

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