Is there a fundamental / technical reason behind this? Does it return in the optimal return? What are the alternatives? What are the determining factors?
Is it more of a "choice" thing for GPs (after they consider the tradeoffs between paying down debt, potential exit price, paying out LPs earlier)? Or is it more "constraint" -based (must hold that much to pay debt, LPs prefer this investment period, etc.)?
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Alpha generating abities diminish significantly with time.
If that explains the upper limit (don’t hold too long), then what explains the lower limit? Why not exit in 2-3 years?
Certain initiatives to create value take time, e.g cost cutting etc. Also, multiple expansion needs time
I guess it is too short of a timeframe to execute on any value creation plan.
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