Update No.16
October 2025
Greetings from Merito Partners
As the investment landscape enters a traditionally active season, Merito Partners continues to pursue opportunities with strong fundamentals and clear value-creation potential. Our pipeline remains active — especially in real estate special situations — but this time we want to highlight another theme that is attracting growing interest from our investors: evergreen investments.
In this edition, we share how these structures are evolving in our region and introduce two new evergreen projects that Merito Partners is currently developing.
What Are Evergreen Investments — And Why Are Investors Increasingly Turning to Them?
In today’s changing markets, many investors are looking for stability and long-term value. Evergreen investments are designed without a fixed end date. Unlike traditional private equity funds that must sell their assets within 5–7 years, evergreen funds offer flexibility, longevity, and compounding growth — making them more attractive to long-term investors.
“Our favorite holding period is forever“
Warren Buffett
Globally, family offices, pension funds, and institutional investors are allocating more capital to evergreen platforms. Why? Because these structures allow for:
- Long-term value creation without the pressure of short-term exits
- Recurring dividend yields and reinvestment possibilities
- Capital compounding, driven by steady earnings and strategic reinvestments
- Strong alignment with management, often resulting in more patient and sustainable business growth
Returns in evergreen structures come from two sources: regular dividends from cash flow and value growth of the business itself, measured through independent valuations. This way, investors enjoy income today and compounding growth over time.
Evergreen funds are becoming a global trend. Below are some useful reports and articles that explain why investors are paying more attention to this model:
- What’s in Your Evergreen Private Equity Strategy? — KKR (2025) – KKR
A detailed guide on structuring evergreen PE strategies, discussing valuation, liquidity, fee structure, and operational challenges. - Evergreen Funds – 2025 Market Overview — Hamilton Lane – explore.hamiltonlane.com
An uptodate market overview, forecasting that evergreen funds could grow to represent 20 % of private markets within a decade. - Global Private Markets Report 2025 — McKinsey & Company – McKinsey & Company
A major industry report that highlights how fundraisers are exploring new vehicles (including evergreen structures) beyond traditional closed‑end formats.
Evergreen Investments by Merito Partners – How This Works?
Merito Partners began working with evergreen strategies in 2024. Since then, interest from our investors has grown quickly. Projects like Baltic Family Capital and Lignord Group show how evergreen structures can be used to build resilient, regionally rooted companies with stable cash flows and growth potential.
In the Baltics, this model is especially relevant. Traditional private equity funds sometimes buy excellent businesses but are forced to exit at the wrong time, often missing out on long-term value creation . With a smaller investor pool and fewer liquidity options in the region, this challenge is even stronger. Evergreen structures remove this pressure, letting value grow naturally. We focus on resilient businesses with clear competitive advantages such as:
- Stable, predictable cash flows
- Loyal clients and strong brand reputation
- Diversified revenue streams across markets
- Unique management or team expertise, with skin in the game
- Regulated or contractual income sources
- Tangible assets that provide security and options
By focusing on these businesses, Merito plans to build evergreen investments that withstand market cycles, pay reliable dividends, and grow in value over time.
We go further by combining evergreen structures with succession-driven opportunities:
- Many first-generation entrepreneurs in the Baltics are retiring and want trusted successors, often at fair entry prices;
- Some foreign investors are exiting due to geopolitical shifts, creating attractive local entry points.
Globally, evergreen funds typically target 8–12% net annual returns, depending on sector and strategy, with dividends often reinvested to boost compounding (Hamilton Lane, 2025). At Merito, we aim higher by combining evergreen structures with succession-driven opportunities, creating a model for premium long-term returns that offers investors steady income, growth, and the flexibility to stay invested in great businesses without the pressure of forced exits. At the same time, we are not — and will not be — opposed to opportunistic exits. While our focus is on long-term value creation, we manage each company in line with best private equity practices, ensuring they are always prepared for discussions with potential buyers should attractive opportunities arise.
New Evergreen Investment Opportunities: Wrapping up 2025
At Merito Partners, we are expanding our evergreen investment strategy into two new sectors with strong fundamentals and long-term growth potential. These opportunities are designed to combine stable cash flows with scalable expansion, creating resilient platforms for future value creation.
MeDi Group – Healthcare Services Consolidation
Healthcare remains one of the most critical industries in the Baltics, shaped by favorable trends such as an aging population, historically low spending, and consistent 7–9% annual market growth over the past decade. With an initial capital target of €5 million, MeDi Group will initiate consolidation of high cash-flow healthcare businesses across multiple verticals, through both M&A and greenfield investments.
The strategy aims to unlock significant upside through:
- Valuation multiple arbitrage;
- Centralized administrative functions;
- Professionalized business development and finance resources.
The project is targeting dividend generation from 2029 and a target net IRR of 15%+. The project is led by an experienced healthcare sector CEO investing significant personal capital, supported by a strong professional network. The first investment — a greenfield clinic with consultations, surgery, and inpatient facilities — is already underway, with a second transaction expected within 3–6 months. We plan to team up with doctors in each of our practice areas, ensuring long-term alignment.
Project Truffle – Baltic Agribusiness Buy-Out
Agribusiness continues to be one of the most resilient sectors, and Project Truffle focuses on acquiring the most efficient farming group in the Baltics. With an equity requirement of approximately €10 million, this leveraged buy-out is structured as an evergreen investment, facilitated by a leading Baltic investment bank.
The business is highly attractive:
- Favorable entry valuation with a valuable arable land portfolio included;
- A proven management team with decades of sector expertise and significant personal investment rolling over their stake in the business and co-investing alongside Merito;
- Strong free cash flow from day one, delivering double-digit net dividend yield, Large tangible asset base providing clear downside protection, complemented by rich recurring cash flows.
If you would like to learn more about our evergreen initiatives and stay updated on upcoming opportunities such as MeDi Tech and Project Truffle, please register your interest below. We look forward to building the next generation of resilient, long-term businesses together.