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Lifecycle of private equity funds

K

Kirsty

Member
The core reading says that the final closing date for a private equity fund is about 12 months after the start of marketing. However the flashcards say that after the intial 3-6 month fund raising period there will be a series of further fund raising period with closing dates over the next 3-4 years.

Am I misunderstanding something or are the flashcards inconsistent with the notes and, if so, which is correct?
 
private equity

Hi, It is likely that this is just two ways of saying the same thing. The ActEd notes will have ben researched from real situations, and this is probably how it happens. There will be an initial closing date, but investors who miss this can still join the fund at later closing dates for a period, provided the manager is sure that the valuation of the fund has not changed much from the initial launch. The core reading sinmply says that the whole process can take up to 12 months, but it would be dependant on a number of factors, and would be different for every fund launch. Hope this helps. So long as you mention something along those lines, if it was asked as a bookwork question - you would get the marks.
 
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