A private-equity fund is, at heart, a contractual clock. The length of that clock—its term—determines when capital must be deployed, when it must be harvested, and how quickly management teams must execute a transformation. Six duration archetypes dominate the industry landscape. They coexist inside most large franchises, yet each carries distinct liquidity, leverage, and governance implications that limited partners (LPs) ignore at their peril.
Classic Decade Closed-End Fund
The workhorse of buy-outs and growth equity: a 10- to 12-year life, usually marketed as “5 + 5.” The first five years from the investment period; the next five build and exit. One or two one-year extensions are baked in for straggling assets. Example: Genstar Capital Partners X, closed in 2022 at US $11 billion, follows this template.
Investor takeaway — predictable liquidity cadence; IRR optics can be managed via early partial exits or subscription-line timing.
Medium-Term Closed-End Fund
A 7- to 9-year horizon suits niche growth plays, special-situations credit, and certain sector carve-outs where the value-creation window is visible but still needs more than a quick flip. L Catterton Growth Fund IV (eight-year term) targets consumer brands in this bracket.
Implication — slightly lower management-fee drag than decade funds; compressed timeline forces an “invest-operationalize-exit” sprint.
Short-Duration / Opportunity Fund
Three to six years from first close to dissolution. Sponsors deploy these vehicles for bridge-to-IPO deals, SPAC sidecars, or distressed assets requiring a fast clean-up. Apollo’s Hybrid Value Fund used a five-year clock to align with public-listing catalysts.
Risk–reward — higher IRR targets but less scope for operational fixes; mis-timed macro cycles can derail exits.
Continuation / Secondary Vehicle
A 10- to 12-year fund seeded with seasoned assets transferred from an older vintage. Capital from secondary buyers gives early LPs an exit while the general partner (GP) gains runway to compound winners. Bridgepoint’s Continuation Fund for Element Materials Technology illustrates how a reset clock plus fresh dry-powder can underwrite add-ons and pricing uplifts.
Note — usually includes recycling rights on annual net-asset-value (NAV) gains, blurring the old “investment-then-harvest” line.
Evergreen / Long-Duration Fund
Either open-ended with no fixed haircut date or contractually 15 years or longer. NAV-based management fees replace commitment-based levies, and distribution waterfalls allow automatic reinvestment. Blackstone’s BREIT (real-estate income trust) and insurance-backed Brookfield Reinsurance Partners show how evergreen capital matches perpetual assets.
Upshot — smooth compounding and fewer forced sales, but quarterly redemption mechanisms introduce liquidity-management risk.
Deal-by-Deal SPV / Single-Asset Vehicle
A special-purpose vehicle lives only as long as its one investment—typically two to five years or “until monetization.” Independent sponsors syndicate equity this way; flagship funds create SPVs for outsized co-invest rounds. Insight Partners’ 2023 single-asset rollover for Monday.com is a recent case.
Key feature — stripped-down governance, rapid investor decision cycles, and bespoke economics (often no management fee, only carry).
