The increased use of subscription lines of credit by general partners in some private-capital funds has lifted returns by squeezing the timeframe over which returns are calculated. We examine buyout, private-credit and real-estate funds to see where the greatest inflation lay.  

Visibility on the use of subscription lines of credit is of key importance to limited partners in private funds. We examined a selection of real-estate, venture-capital and buyout funds to note some key differences between and within private-capital strategies. 

Amid the growing usage of sub lines across private capital funds, we explore how intensively funds draw on their sub lines — a critical determinant of how sub lines will affect internal rates of return.

Private capital funds have grown increasingly comfortable utilizing subscription lines of credit, though usage varies. We examine their deployment across venture capital, buyout, real estate and debt funds. 

Constructing self-financing private-capital portfolios, where distributions exceed contributions, can simplify a limited partner’s liquidity-management strategy and reduce cash drag. How could diversification help investors in this effort? 

Are general partners overstating zombie valuations, and thereby postponing eventual write-downs, or should LPs ultimately expect this capital to be distributed in full? We present evidence that zombie assets have been, on average, appropriately valued. 

An assessment of private-market cash flows as of June 2022 indicates mixed signals for limited partners. The prudence of maintaining a diversified portfolio is as important as ever.

Analysis of the Burgiss Manager Universe revealed heavy concentration within private debt across rate structure, seniority and benchmark index. We break down the findings for investors.