'Our funds are 20 years old': limited partners confront VCs' liquidity crisis | TechCrunch

"These days, it's not easy to be a limited partner who invests in venture capital firms. The "LPs" who fund VCs are confronting an asset class in flux: funds have nearly twice the lifespan they used to, emerging managers face life-or-death fundraising challenges, and billions of dollars sit trapped in startups that may never justify their 2021 valuations. Indeed, at a recent StrictlyVC panel in San Francisco, above the din of the boisterous crowd crowd"

"gathered to watch it, five prominent LPs, representing endowments, fund-of-funds, and secondaries firms managing over $100 billion combined, painted a surprising picture of venture capital's current state, even as they see areas of opportunity emerging from the upheaval. Perhaps the most striking revelation was that venture funds are living far longer than anyone planned for, creating a raft of problems for institutional investors."

""Conventional wisdom may have suggested 13-year-old funds," said Adam Grosher, a director at the J. Paul Getty Trust, which manages $9.5 billion. "In our own portfolio, we have funds that are 15, 18, even 20 years old that still hold marquee assets, blue-chip assets that we would be happy to hold." Still, the "asset class is just a lot more illiquid" than most might imagine based on the history of the industry, he said."

Limited partners face a venture capital asset class in flux, with funds lasting nearly twice as long as before and increasing illiquidity. Many funds now run 15–20 years and still hold marquee blue-chip assets, delaying distributions and stretching expected return timelines. Several firms now model 18-year fund lives with the bulk of capital returning in years 16 through 18, prompting portfolio reallocations and more conservative deployment decisions. Emerging managers confront acute fundraising challenges, while billions remain tied up in startups that may not justify prior valuations. Secondary markets have become essential infrastructure for liquidity and active portfolio management.

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