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Recycling

Reinvesting realisation proceeds rather than distributing them, within limits set by the fund documents.

Recycling — Reinvesting realisation proceeds rather than distributing them, within limits set by the fund documents.

Recycling provisions are typically capped and time-limited in the LPA specifically to prevent a manager from indefinitely deferring distributions in favour of continued reinvestment — investors want eventual realisation, not perpetual redeployment.

Frequently asked questions

Does recycling extend a fund's life?

Not directly — but it can affect the pacing of distributions, since proceeds that would otherwise be returned are instead redeployed, subject to whatever caps and time limits the LPA specifies.

Is recycling good or bad for investors?

It depends on the terms — recycling can improve capital efficiency and returns if the manager continues to find good opportunities, but investors generally want it capped rather than open-ended.

Nothing on this page is legal, tax, or investment advice. SeRuM is not a registered broker-dealer, not a placement agent, and not an investment adviser.

DistributionA payment from a fund to its investors, of realisation proceeds or income.WaterfallThe order in which distributions are split between investors and the manager, through retu LPALimited partnership agreement: the constitutional document governing a fund's economics, g

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