Investment Period
The investment period is the phase during which a fund can make new investments, typically the first several years of the fund’s life.
Definition
The investment period defines when a fund is permitted to deploy capital into new investments. After the investment period ends, funds typically focus on follow-ons, portfolio management, and exits. Investment period length affects pacing, fees, and the timing of exposure. Allocator Context Allocators evaluate investment period length relative to strategy. A long investment period can provide flexibility but may extend time to full deployment; a short period can increase pressure to deploy quickly. Institutions also consider how investment period interacts with fee bases and capital call expectations. Decision Authority Investment period terms are reviewed during fund diligence and often influence IC comfort with liquidity planning and pacing. Nonstandard investment period structures can trigger negotiations. Why It Matters for Fundraising Managers should clearly communicate how they deploy within the investment period and how follow-ons are handled after it ends. This directly affects allocator cash flow forecasting. Key Takeaways Controls when new deals can be made Impacts pacing, fees, and exposure timing Must be consistent with strategy reality Central to LP liquidity planning