Abstract and Intro
This is the university where both authors, Robert Bartlett and Paolo Ramella, are affiliated.
What is Stanford (Stanford Law School)?
To sustain NAV-to-cash conversion as IPOs declined, funds shifted exit channels toward these two channels instead.
What are acquisitions and secondary transactions?
The sub-asset class with the most pronounced shift in timing of value realizations across fund vintages (buyout, growth, venture)
what is venture capital
This term describes the speed with which reported valuations are converted into realized distributions returned to investors.
What is value conversion?
This regularly-reported LP performance metric becomes a mechanically 'hybrid' object, combining realized distributions with estimated valuations.
What is IRR (internal rate of return)?
This is the data provider whose linked quarterly fund cashflow and NAV data, combined with portfolio-company investment, valuation, and exit data, underlies the entire study
What is PitchBook?
This is the term for the mismatch the paper highlights between how quickly capital goes into a fund versus how slowly it can come back out.
What is an asymmetry between capital deployment and capital return?
According to the abstract, many funds continue distributing capital for more than this many years.
What is twenty years?
This term describes the extent to which a fund generates economic value per dollar of invested capital through the growth, scaling, and valuation of its portfolio companies.
What is value creation?
This ratio measures the fraction of total value created to date, realized and unrealized, for investors in a fund
what is TVPI
This is the range of vintage years for the funds studied in the paper.
What is 1995 to 2014?
In venture capital, this type of repeat buyer has played an increasingly important role in providing exits, per the abstract.
What is a serial acquirer?
For the 2010–2014 VC vintage, the median fund's year-10 NAV exceeded this — the total capital investors had committed to the fund.
What is committed capital?
The authors explain that two funds can show similar levels of this cash-realization metric (distributions over paid-in capital) at a given point in time, yet carry very different levels of unrealized NAV.
What is DPI (distributions to paid-in capital)?
This is the general financial mechanism by which extending the horizon over which unrealized value is eventually distributed tends to depress an already-positive IRR, unless NAV appreciates enough to offset it.
What is the time value of money (discounting)?
The research leverages PitchBook data spanning ______, allowing the authors to examine structural changes across multiple decades of private fund evolution
What is 1995-2024
The paper finds that late-life distributions aren't just a matter of funds still existing on paper — they also matter for this reason, distinct from mere survival.
What is economic magnitude
For late-1990s VC funds, NAV follows this kind of trajectory over the fund's life: rising rapidly early on, then declining steadily as investments are exited.
What is an early-peaking (positively skewed) NAV profile?
The authors state that observed NAV late in a fund's life may reflect differences in underlying value creation, but also differences in this — the pace at which value is realized.
What is the timing of value realization (conversion speed)?
The authors argue GPs face muted incentive to accelerate latelife distributions because carry is calculated on absolute dollar profits without regard to this.
What is the timing of realization (time value of money)?
Proposals to broaden retail access to PE and VC most notably aim to embed private-fund exposure within this kind of retirement plan.
What is a defined-contribution retirement plan (e.g., a 401(k))?
For PE funds in the 1995-1999 vintage cohort, this share were still reporting new distributions 20 years after formation, and this smaller share at 25 years.
What is more than 43% (at year 20) and 8% (at year 25)?
The two forces reported NAV conflates
what is...
1. the amount of value generated per dollar of invested capital
2. the speed at which the value is converted into cash distributions
To disentangle whether elevated year-ten NAV reflects delayed exits versus something else, the authors say doing so requires observing these two things over long horizons and comparing their evolution within funds.
What are valuations and cash flows?
This is the term for the phenomenon whereby strong-looking interim IRRs decline as a fund's remaining unrealized value is eventually converted to cash over an extended horizon.
What is IRR-unwinding (or downward IRR drift)?