EXS Capital chief executive Eric Solberg disclosed to the Wall Street Journal's Private Equity Beat that Asian investors need to think about evergreen funds. Solberg, a former Citigroup Venture Capital International partner, believes that evergreen funds are a good fit for Asian private equity.

Evergreen funds, as defined in the WSJ report, are funds wherein investment returns are put back into a fund when they are realized instead of being distributed to limited partners.

One reason Solberg said why evergreen funds are a good investment is because the pressure to sell portfolio companies prior to the need to do so will be taken off from fund managers. Fund managers, the WSJ report explained, need to sell off portfolio assets in order to comply to the usual five-year investment period, which would probably result to selling the assets at a discount.

Solberg also added that investment in evergreen funds will reduce the need for general partners to conduct a fundraising campaign. This is because an evergreen fund is already topped by any returns on investment. According to the WSJ report, the fundraising environment in Asia was a challenge last year as limited partners had to hold back from distributing additional capital to their general partners, who in turn had difficulties to distribute capital themselves in the middle of a lackluster exit period in the region.

Some investors had concerns about evergreen funds. FLAG Squadron Asia partner Wen Tan commented, "The big question, as an investor, is how do you get out of an evergreen fund? If it's a single pool structure, it's difficult to find another investor to buy you out. If it's a multiple account structure, there will be increased complexity and reduced alignment between investors who have come in at different times."

It is to note that Solberg had a difficult time to raise an evergreen fund since 2011, the WSJ report said.