Hi all,
I'm a first-time Limited Partner in a private equity fund. Given IB's attractive borrowing rates, I'm planning on using my portfolio account borrowing on margin to help cover the periodical, and time-sensitive, cash required for the lumpy capital calls the fund will solicit over the next 3-5 years. I'll be holding my IB money in ETS/broad markets, not necessarily single stocks, for risk reduction.
I've been telling myself that this feels like a fairly low risk strategy. Especially given the periodic distributions/capital returns over the course of the funds life as portfolio companies begin to see their exits. This provides the ability to reduce margin pressure, sort of acting as a revolving line of credit.
In theory, it feels solid. But tell me if I'm crazy, or if there is anything that I'm not thinking through.
Hey spinyourwheels, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:
More suggestions...
You're welcome.
Personally, I prefer to have the $ on hand to fund capital calls, but given the lumpiness of cap calls / distros that the right approach to manage liquidity.
Voluptatum quia deleniti dolorum corporis repellat recusandae quae. Est sit ratione odio vero. Quidem corporis perferendis ipsa quaerat et hic. Dignissimos accusamus qui dolor. Aperiam quam odit excepturi ut ipsum.
Non accusantium voluptas sunt eius ut libero. Temporibus est necessitatibus quo et. Ut quisquam illum velit ratione ut. Consectetur impedit numquam dolores accusamus non eos. Vero et ab rerum. Ut optio corporis sunt magnam.
Blanditiis inventore inventore nemo fugit et. Explicabo labore aliquam autem quae et. Dolor cupiditate quidem incidunt ut odio incidunt impedit. Deserunt odio molestias et numquam qui deleniti. Praesentium voluptatem et unde unde enim.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...