A lock-up is an access condition, not one asset class.
Private equity, lending, property partnerships and collectibles earn differently. Illiquidity means difficulty obtaining money on acceptable terms because of missing buyers, legal restrictions or contracts. Permission to buy proves neither quality nor extra return.
Trace the economics behind the restricted exit
- Private equity
- Business results, financing, valuations and distributions.
- Private lending
- Receipts, default, recovery and expenses.
- Property partnership
- Net property income, financing and disposal proceeds.
- Collectible
- A buyer’s payment less dealing/ownership costs.
SEC private-placement examples describe limited information, resale difficulty and possible total loss. Their US offering rules are not universal eligibility terms. Passive ownership leaves dependence on managers’ work and business financing.
A quarterly appraisal is not a waiting buyer.
Check the valuation date, assumptions and transaction evidence. Did a reported funding-round price buy the same rights as your claim? When was an unchanged valuation last reassessed? Without those answers, treat it as a reported estimate rather than evidence of an executable sale price or lower risk.
Buyers may demand discounts or never appear. Private/listed assets can share customers, borrowing conditions and downturns despite different reporting frequency.
Collectible condition and the claim being priced
Before using another transaction as a comparison, check whether its claim, rights and sale conditions match yours. For collectibles, identification, condition and resale demand matter. The CFTC/FINRA metals advisory distinguishes dealer/collectible prices from metal value; a headline valuation promises no sale proceeds.
A repurchase offer can leave half invested.
Request → valuation → payment: different dates
Budget ÷ requests = 50% accepted.
Your request: €8,000
Solid: €4,000 paid. Hatched: €4,000 of the requested amount stays invested.
US interval-fund windows can be limited, including later offers. A target exit, transfer possibility or termination process need not supply payment when your bill is due.
The remaining exit terms
No later full payment follows from this round. Read deadlines, valuation/payment dates, missing-buyer provisions, delayed sales and possible term extensions. A target date alone creates no enforceable payment obligation.
Uncalled commitment is an obligation, not another asset.
Commitment: €30,000 agreed
€10,000 already funded; €20,000 still callable (dashed).
This tracks contributions, not asset value. The locked €10,000 cannot also fill the gap.
Separate available cash
€25,000 before the call
Pay the €20,000 call ↓
€5,000 remains for the €12,000 bill
Hatched: €7,000 missing when the bill is due.
Your contract sets timing, failure-to-pay consequences and obligations beyond the headline amount. Reported investment value does not settle a call.
Commitments, calls and the governing contract
ILPA Principles 3.0 distinguishes agreed commitment from a subsequent capital call for investments/expenses. This investor industry association’s principles do not replace the contract.
Assuming no additional fees or obligations, combined demand is €32,000 against €25,000 available. The unfunded €20,000 is not wealth.
Can the funding plan survive delayed proceeds?
Include management, performance, transaction and underlying-vehicle costs, their fee base and early-exit treatment. Compare net results with an accessible alternative serving a similar economic role, acknowledging risk differences.
Delegation leaves records, calls and exit notices. Stress delayed proceeds alongside falling assets and lower income: both necessary spending and calls require money when due.