Feeder Funds, Evergreens and ELTIFs: The Structures That Lower the Ticket, and What They Charge You For It

Nobody Lowers a Minimum. They Change the Vehicle.

If part two of this series established anything, it is that a fund minimum falls out of a legal holder cap and a cost base rather than a marketing decision. Which leads to the practical question: when someone offers you access at a fraction of the stated minimum, what have they actually done?

They have put a structure in between. There are only a handful of them in common use, they each solve the problem in a different way, and — this is the part that gets skipped — they each charge for it in a different currency. Some take a fee. Some take your liquidity. Some take your information rights. Knowing which is which is most of the skill here.

This is part three of the Access Series. Part one covers the investor classification tests; part two covers why the minimum is high in the first place. For the routes into private equity specifically, see our private equity access guide.

The Five Structures You Will Actually Be Offered

The feeder fund. A separate legal vehicle that pools a large number of smaller investors and subscribes to the underlying fund as a single limited partner. It occupies one slot on the register, which is precisely the point: it defeats the holder cap. You are a shareholder or partner in the feeder, not in the fund. Your rights are whatever the feeder's documents give you, which is usually less than a direct investor gets.

The platform or aggregator. Commercially similar to a feeder but run by a third party rather than by the sponsor, often across many funds. The economics are the same: one line on the fund's register, many investors behind it, a fee for the service.

The evergreen or semi-liquid fund. A fund that stays open, accepts subscriptions on a rolling basis, and offers periodic — not daily — redemptions. No capital calls; you are fully invested on day one. That solves the liquidity-reserve problem that makes drawdown funds so demanding, and it introduces a different problem, discussed below.

The interval fund. A US registered closed-end fund that makes repurchase offers at fixed intervals. The rule is specific and worth knowing, because it is the clearest statement anywhere of what "semi-liquid" really means. Under 17 CFR 270.23c-3, "periodic interval shall mean an interval of three, six, or twelve months", and "the repurchase offer amount shall not be less than five percent nor more than twenty-five percent of the common stock outstanding on a repurchase request deadline." (Verified at law.cornell.edu/cfr/text/17/270.23c-3, 8 August 2026.)

The ELTIF. The European Long-Term Investment Fund, a regulated EU wrapper for long-term and private assets. Its second iteration materially changed retail access. Regulation (EU) 2023/606 applies from 10 January 2024, and recital 47 states the reasoning plainly: "When applied together, the EUR 10 000 initial minimum investment and the 10 % limit on aggregate investment create a significant obstacle to investments in ELTIFs for retail investors, which conflicts with the goal of ELTIFs to establish a retail alternative investment fund product. It is therefore necessary to remove the EUR 10 000 initial minimum investment requirement and the 10 % limit on aggregate investment." (Verified against the consolidated text on eur-lex.europa.eu, 8 August 2026.)

That is a genuine, verifiable liberalisation of access, and it is the single most consequential change in this area in recent years for European investors. It is also not a promise about any individual ELTIF's minimum, which the manager still sets.

Comparison of Structures

The Fee Layer Is the Easiest Cost to See and the Easiest to Understand Wrongly

When a structure sits between you and the fund, somebody is paid to run it. That fee is charged in addition to the underlying manager's fee, not instead of it. This is not a scandal — the feeder genuinely does work — but it changes the arithmetic in a way that is easy to underestimate over a long holding period, because it compounds against you every year rather than being a one-off entry cost.

An illustrative demonstration, using assumed round numbers purely to show how compounding behaves. These are not market fee levels, not a forecast, and not a claim about any real product:

Assume a gross annual return of 10 per cent, held for ten years, on 100,000. With no fee at all, the arithmetic gives roughly 259,000. Take 2 per cent a year and the compounding rate becomes 8 per cent, giving roughly 216,000. Add a further 1 per cent a year at the access-vehicle level and the rate becomes 7 per cent, giving roughly 197,000. That last percentage point — the one charged for access rather than for management — costs about 19,000 over the decade in this illustration, roughly a fifth of the original capital.

The lesson is not "avoid fees". It is that an access fee should be compared against the alternative of not investing at all, over the actual holding period, at the actual fee level in the actual documents. One percentage point sounds like rounding and behaves like a tax.

Liquidity Is the Currency Most People Overlook

The interval fund rule quoted above is the honest version of what semi-liquid means, so use it as your mental model for the whole category. A repurchase offer of between five and twenty-five per cent of shares outstanding, at three-, six- or twelve-month intervals, is a real liquidity feature — and it is also an explicit statement that if every holder asks for their money at once, most of them will not get it.

Evergreen vehicles work the same way, and the mechanism is a gate: redemptions are pro-rated when requests exceed the offer. That is not a defect. It is the design, and it is the only responsible design for a fund holding illiquid assets. The failure mode is not the gate — it is an investor who understood "semi-liquid" as "liquid" and finds out otherwise in precisely the month they need the money.

Two consequences follow. First, an evergreen fund should not be treated as a cash substitute, whatever the redemption schedule says. Second, evergreens usually hold a liquidity sleeve of cash or listed assets to meet redemptions, which means a portion of your capital is not invested in the private assets you came for. That drag is the price of the redemption feature. It should be disclosed; ask for it as a percentage.

Adverse Selection: The Question Nobody Wants Asked

Here is the uncomfortable one. If a manager can raise all the capital they need from institutions at a two-million minimum, why are they building a retail-facing feeder at fifty thousand?

Sometimes the answer is good: the manager is deliberately building a durable, diversified capital base, or a genuinely long-dated strategy, or their strongest institutional relationships are already at their allocation limits. Sometimes the answer is that institutional demand for that strategy has cooled, and the wealth channel is where the remaining capital is. Both happen. You cannot tell from the brochure.

What you can do is check three things. Is the vehicle you are offered investing in the same deals as the flagship fund, or in a separate pool? Is the manager's own capital in it? And has the flagship fund been raised recently, at what size, and from whom? A manager who answers all three plainly is very different from one who answers none.

What to Ask

• Am I buying the fund, or a vehicle that buys the fund? One sentence, in writing.
• What is the total fee, expressed as everything charged at every layer, in one number?
• Does the access vehicle invest in the same deals, on the same terms, as the flagship?
• If this is semi-liquid: what is the redemption interval, what is the maximum size of a repurchase offer, and what happens if requests exceed it?
• What percentage of the portfolio is held in a liquidity sleeve rather than in the target assets?
• Do I get the underlying fund's reporting, or a summary produced by the vehicle?
• How is this valued between reporting dates, and by whom?

Honest Limits

The interval-fund and ELTIF facts above are quoted from primary legal sources on 8 August 2026. Every fee figure in the worked example is invented to demonstrate compounding and should not be treated as typical. We have not verified the terms, minimums or fee levels of any named product or manager, because those live in offering documents that are not publicly retrievable and, in several cases, sit behind websites that block automated requests. Get the numbers from the documents.

Private and semi-liquid funds can lose money, can suspend redemptions, and can be worth materially less than their last reported valuation. None of this is investment advice.

The Counter-Argument

There is a serious case that this entire category of structure is a good thing and the scepticism above is overdone. For most of modern history the returns available in private markets were reserved for institutions and the very wealthy, and the people excluded were excluded by a legal accident rather than by any judgement about their competence. Structures that widen access are, on that reading, a democratisation worth paying a fee for — and a fee for access to something you could not otherwise buy at all is not obviously a bad trade.

We think that case is right in principle and needs one condition attached. The fee is defensible when the access is real: the same deals, the same manager, the same alignment, with a clear statement of the liquidity you have given up. It stops being defensible when the retail vehicle holds a different, weaker pool, charges two layers for it, reports less, and markets a gate as a redemption feature. The structures are not the problem. The absence of a plain answer to "what am I actually buying" is the problem — and that question costs nothing to ask.

FAQ

Is a feeder fund a bad thing? No. It is a mechanism, and for most individual investors it is the only realistic way into a capped fund. The question is what it charges and what rights it passes through.

What does semi-liquid actually mean? It means periodic, capped and pro-rated redemption. The interval fund rule — repurchase offers of five to twenty-five per cent at three-, six- or twelve-month intervals — is the clearest published statement of the shape.

Did ELTIF 2.0 remove all retail restrictions? It removed the EUR 10,000 initial minimum and the 10 per cent aggregate limit, per recital 47 of Regulation (EU) 2023/606, applying from 10 January 2024. Suitability assessment and the individual fund's own terms still apply.

Should I prefer an evergreen over a drawdown fund? They solve different problems. An evergreen removes the capital-call burden and the liquidity reserve it demands; a drawdown fund gives you a defined life and typically no redemption gate to worry about because there is no redemption. Choose against your own cash-flow reality, not against the marketing.