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How LPs Use Fund-Level Liquidity Metrics for VC Portfolio Construction

How LPs Use Fund-Level Liquidity Metrics for VC Portfolio Construction

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Episode 62 of The Venture Capital Investor Podcast digs into a less-discussed but essential LP tool: fund-level liquidity metrics. Lucas and Luna explore how sophisticated limited partners—like the University of Texas Investment Management Company, which manages $65 billion—use metrics such as the percentage of unrealized NAV older than five years and the ratio of distributions to paid-in capital to build more resilient venture portfolios. They discuss a 2025 paper from Cambridge Associates showing that funds with less than 20% of NAV in companies held over seven years outperformed their peers by 250 basis points annually. Lucas explains why LPs should demand quarterly liquidity reporting from GPs, and Luna questions how smaller LPs can access this data without a dedicated analytics team. The episode closes with a practical framework for incorporating liquidity scoring into commitment decisions, including a worked example comparing two hypothetical funds. This is a concrete, numbers-driven look at a topic that rarely makes headlines but moves the needle on real returns. #LiquidityMetrics #VentureCapital #LPs #PortfolioConstruction #PrivateEquity #FundPerformance #CambridgeAssociates #UTIMCO #NAV #DPI #TVPI #VCInvesting #AlternativeAssets #FundAnalysis #Business #Finance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo
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