True or False: Assuming a typical Private Equity Fund structure with a 10Y life, the first 3Y to 5Y are referred to as the Harvest Period and the last 5Y to 10Y are referred to as the Investment Period.
Agree
Disagree
Answer: Disagree
Investment period means the period of initial phases of a project or product life cycle, where a lot of amount has to be invested. A harvest period means a reduction or a termination of investments in a product, project so that the entities involved can reap or harvest the maximum profits. A harvest period typically begins at the end of a product's life cycle when it is determined that further investment will no longer boost product revenue.
Investors will use a harvest period to collect the profit from their investment. Most investors estimate that it will take between three and five years to recoup their investment.
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