How Institutions View Gated Evergreen Funds | Rich Nuzum

Rich Nuzum, head of OCIO at Franklin Templeton, speaks with Adam Smallman at the PEI Private Credit New York Forum about how institutional investors responded to gating at semi-liquid evergreen funds. He describes most investors looking past the headlines to the quality of underlying loans and continuing to use the vehicles alongside drawdown programmes, while a smaller group favors less concentrated vehicles with less retail money and less high-profile managers. The conversation also covers AI and data-center financing, deployment by client segment, insurance general accounts, refinancing pressure and how sovereign wealth funds and closed defined benefit plans use private debt differently.

1. Most institutions looked through gating headlines to the quality of the underlying loans and kept using evergreen vehicles as a complement to drawdown programmes.
2. A smaller group now favors vehicles that are less concentrated, carry less retail money and come from less high-profile managers.
3. Many institutions concluded they already hold enough AI and digital exposure and are using the moment to look at less correlated forms of private credit.
4. Current long-dated yields are prompting trustees to revisit fixed income allocations, while insurers try to anticipate regulatory and rating agency treatment years ahead.