Investing in Private Equity – Capital Commitment Considerations

Sameer Jain

Active Allocator Inc.; Massachusetts Institute of Technology (MIT); Harvard University

April 3, 2012

UBS Alternative Investments, September 6, 2011

This paper explores capital commitment and cash-flow management issues in private equity fund investing. It provides a theoretical framework to structure private equity capital commitment issues in a formal manner, and defines variables, inter-relationships, and boundaries in such a way that the problem can be worked upon. The paper’s findings suggest that achieving a targeted level of allocation to private equity is a function of the pace of capital deployment as well as dependent upon the desired amount of targeted exposure. It is also dependent on the spread of realized returns in private equity versus other asset classes, as well as on timing and realization periods for capital already invested.

Number of Pages in PDF File: 7

Keywords: private equity, commitment, J Curve, drawdown

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Date posted: April 3, 2012 ; Last revised: May 28, 2013

Suggested Citation

Jain, Sameer, Investing in Private Equity – Capital Commitment Considerations (April 3, 2012). UBS Alternative Investments, September 6, 2011. Available at SSRN: https://ssrn.com/abstract=2034010

Contact Information

Sameer Jain (Contact Author)
Active Allocator Inc. ( email )
NJ 07310
United States
Massachusetts Institute of Technology (MIT) ( email )
77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States
Harvard University ( email )
1875 Cambridge Street
Cambridge, MA 02138
United States
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