Preferred returns
Curious if anyone has a sense for why market for some types of alternative asset funds is to have preferred returns / performance hurdles while others do not? Hedge funds and venture are 20 over a 0, yet real estate funds are 20 over a 6-8% return. I can’t speak to vanilla PE. I’ve heard the idea that it’s because real estate is cash flow generating (vs VC) and because it’s an incentive to LPs for tying up their money (as opposed to HF where there is quicker liquidity).
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