Term: Fund extension

Private equity funds have specific life-spans assigned to them often 10 years. Following these lifespans the funds are often allowed two automatic one-year extensions if there are remaining portfolio investments that need to be exited. Very often 12 years is still not enough to fully exit these investments and the GPs must request further fund extensions from the LPs. Funds that enter year 13 14 15 or beyond and still have unexited investments are sometimes called zombies. As in: Most of our GPs hit year twelve and need to ask us for fund extensions.

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