Cracking the Illiquidity Code

September 6, 2018

Once private equity investors sign a fund commitment, they begin a 10- to 15-year relationship with the GP.

With time horizons this long, it’s no wonder the asset class attracts life insurers and pension funds; it’s also clear why many perceive private equity to be a waiting game. That shorter-term investors also invest in private equity, however, indicates the asset class is not as illiquid as the long fund life would suggest. To quantify the liquidity of these investments, we look at the duration of private equity cash flows and crunch the numbers from different angles using our proprietary data.

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