Hold Period
The duration of a private-equity investment from acquisition close to exit. Typical LBO hold periods range from 3-7 years, with a median around 5 years across institutional vintages. Shorter holds (under 3 years) usually reflect either accelerated value creation (genuine outperformance) or sponsor IRR-engineering (fast flip to optimize the timed-return metric). Longer holds (above 7 years) usually reflect underperformance (the deal cannot exit at the modeled multiple) or strategic alternatives that require patience. Hold-period IS the primary determinant of MoIC-to-IRR divergence: same MoIC over more years produces lower annualized IRR.
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Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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