Maximum exposure/ overcommitment
Hello everybody,
just a short question: Why is the maximum exposure of most private equity funds only around 60-90%?
I can see the use of overcommitment in order to maximise the exposed capital, but besides some "security" aspects these low rates of maximum exposure don´t make sense to me.
I know it´s probably a stupid question but one of my courses goes quiet into detail concerning PE and so im wondering if anybody could answer my question.
Thank in advance!
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