Growth in the evergreen fund market is being driven by the largest listed alternative managers. But there are asset classes in which size is likely to be a weakness rather than a strength in catering to individual investors.

This, at least, is what venture capital and growth equity manager Fairway Capital Management is banking on.

Founded in 2020 by a group of former executives with Adams Street Partners, led by former COO Kevin Callahan, the Chicago manager raised two venture-capital funds of funds with combined commitments of $52 million, including a sizeable GP commitment, before launching an evergreen fund of funds at the end of 2021.

Fairway Private Equity & Venture Capital Opportunities Fund, which makes VC, private equity and private credit investments, aims to offer individuals access to funds and managers "typically only available to large institutional investors." It held about $26.3 million in net assets as of March 31, 2026, per regulatory filings.

While firms such as Blackstone and Apollo Global Management have had success launching evergreen products focused on easily scalable asset classes, such as infrastructure and large buyout, VC is inherently "capacity constrained," according to Callahan.

VC has the widest gap between top- and bottom-quartile fund performance of any private market strategy, according to PitchBook's Q4 2025 Global Fund Performance report, accounting for a 16.6% IRR spread for 2005-2020 vintages, versus 14.4% for PE growth. This makes it imperative that investors gain access to the best managers, whose ability to grow their funds is limited by the number of high-conviction bets in the market.

"It's very difficult and probably impossible to continue to put more and more money [into capacity-constrained asset classes] and deliver the performance that people expect from them," Callahan said.

Even lucrative venture deals, Callahan said, don't always flow into evergreen vehicles. Large firms have to divvy up investment between their institutional funds and separately managed accounts, whereas Fairway invests out of a single fund.

Kevin Callahan, founding partner, Fairway Capital Management

How this is divided varies from manager to manager. Some of the largest funds protect against this risk with policies and regulatory structures, like Blackstone's BXPE, which has contractually allocated a small stake in every private equity deal the firm closes, PitchBook previously reported.

"We can truly look people in the eye and say, these are our best ideas going into this fund, and that's one of the benefits of being smaller," Callahan said.

Fairway's evergreen fund includes investments with Bain Capital Ventures, Battery Ventures, Thoma Bravo and Adams Street. Callahan said the team is considering additional investments in funds like CRV XIX and Primary Ventures IV.

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Fairway's single-fund model faces its biggest test as Callahan pushes into secondaries, a strategy Fairway has largely avoided until now. The firm plans to allocate 20% to 30% of its portfolio there, up from a single continuation fund investment today.

Callahan said he has largely avoided secondaries to date due to declining valuations and asset quality from 2020 to 2022, and has instead prioritized primary fund commitments.

"I just thought it was a horrible time to be investing in secondaries," he said. "I thought for sure the first half of 2022, we could buy a lot of secondaries at say a 20% discount and feel good for a quarter or so and then watch that NAV deteriorate after that."

Now that Fairway is in the secondary market, it wants to emphasize asset quality over headline discount. A great asset bought at a 10% discount is a better bet over the long term than an average one bought at a 30% discount.

"If you're totally or largely reliant on secondary discount write-ups to drive your performance and the new [fundraising] flows slow down, that game can stop pretty quickly," Callahan said.

This article originally appeared on PitchBook News