Illiquid strategies have been a darling for investors for decades now. Experts in exploiting the illiquidity premium, GPs have provided great returns in absolute and relative terms to liquid markets through time. Over the last 8 years, however, exists have been in decline: perhaps valuations at purchase were more demanding and companies in GPs portfolios were in need for more time to produce the desired multiples. On the other end, new PE funds are calling capital for new investments, and consequently, are squeezing LPs, that haven’t realized their prior exits but need to comply with new commitments and perhaps are forced to use the liquid part of their portoflios to confront those calls. Or debt. In any event, if exits don’t accelarate, calls will slow down.
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