Benefits to organizations investing their excess cash in a BDIA include the potential to earn more than traditional bank accounts, no limit to the amount that can be deposited, a professionally managed solution that can be customized and cash maintained in one highly liquid account with no lockup periods
or penalties for early withdrawals.
Lawrence Calcano, managing partner at iCapital Network, says that lockup periods
associated with PE funds "are one of the largest issues that people have to grapple with before investing.
2011), the existing papers primarily focus on venture capital (VC) firms or disregard the exit process in the time after the IPO or following the end of lockup periods
After the expiration of first of the several lockup periods
barring insiders from selling Facebook's stock following its IPO, early investors, who owned a combined 271 million Facebook shares, became eligible to sell their stock.
According to State Street's Vision paper, today's post-crisis environment fund selection will emphasise six critical operational and risk management elements: investment strategy and performance, portfolio liquidity, portfolio transparency, reconsideration of pricing and lockup periods
, operational due diligence and the independence of custodians and administrators.
While regulations have been loosened now to allow more investors into these funds, there are still significant barriers to hedge fund investing, including high fees, large minimum investments, long lockup periods
and the risk of management fraud.
We test whether those ventures specifying dependence on key entrepreneurs will seek to alleviate retention concerns with key entrepreneurs through longer lockup periods
Private-equity-like hedge funds have shorter lockup periods
26) The lockup periods
for funds that have them are generally around a year.
However, Brau, Lambson, and McQueen (2005) formally develop a signaling model, which predicts that less transparent or less risky firms would impose longer IPO lockup periods
due to information asymmetry or a lower lack of diversification costs.
He argues that longer lockup periods
may result in lower cash holdings and investment from long-term point of view, resulting in better performance.