Topic · Core Finance & Asset Classes
← All topicsPrivate Markets
16 articles · 3 checkpoints · 12 deeper reads · 1 reference notes
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A private fund is not a pot of money sitting ready to invest. It is a promise from investors to send money when asked, managed by a general partner who decides when to call it and when to give it back.
A private equity investor doesn't hand over their money on day one, they promise it, and get called for slices of it over years, while paying fees on the whole commitment long before any profit comes back. That timing mismatch is why every PE fund's returns trace a J shape.
Private markets have historically reported higher returns than public markets, but nobody agrees on how much of that gap is real compensation for locking up capital, and how much is an artifact of how private assets are valued.
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