hmm, that model wouldn't be good for me. I mean I usually stay pretty liquid but I'm liquid in positions I want to see through to a price target! Just getting a random email or message to go indefinitely illiquid because I told them I'd be an LP would be a tough sell for me.
I like the hedge fund with a heavy side pocket better. so its kind of cool Sequoia is describing just that. But I am wondering if there is an existing hybrid where the the PE fund has all the capital upfront and just has liquid investments for the cash before finding illiquid investments, where the majority of capital winds up in the illiquid investments anyway.
General Partners can
1) keep the current fund open for new limited partners
2) start a new fund for people that want to feel like they are on the ground floor, and allow the GP to get a new headline about how fast they raised a bunch of capital.
they don't call indefinitely, the committed amount is called over a 2-3 year period. they do this because it lets them keep the IRR low (since uncalled capital isn't invested and thus not counted)
LPs generally do not want to have them take money and invest it into one thing and then another thing. they want to choose specifically what things they allocate to and nothing else.
accounting is much more complicated than closed end fund.
so essentially the way the world works means the things you are hoping for will never happen.
I like the hedge fund with a heavy side pocket better. so its kind of cool Sequoia is describing just that. But I am wondering if there is an existing hybrid where the the PE fund has all the capital upfront and just has liquid investments for the cash before finding illiquid investments, where the majority of capital winds up in the illiquid investments anyway.
General Partners can
1) keep the current fund open for new limited partners
2) start a new fund for people that want to feel like they are on the ground floor, and allow the GP to get a new headline about how fast they raised a bunch of capital.