What is the typical duration of the entire private equity fund lifecycle?

The typical duration of the entire private equity fund lifecycle is indeed around 10-12 years total for all operations. This comprehensive timeframe encompasses several critical phases, starting from the fundraising stage where capital is raised from investors, followed by the investment period where the fund identifies and acquires target companies.

This lifecycle includes the holding period for the investments, which generally lasts about 4-7 years, during which the private equity firm works to increase the value of the portfolio companies. Lastly, it involves the exit phase, where the firm divests from these companies through various means such as sales or public offerings. The entire process from beginning to end, including fundraising, investing, managing the companies, and exiting, is why this option accurately reflects the typical duration of a private equity fund lifecycle.

In comparison, the other options do not encompass the full scope of the timeline. The period for deal sourcing or portfolio management alone is much shorter and overlooks critical aspects of managing the investments and executing the exit strategy. Thus, 10-12 years is representative of the longer-term nature of private equity investments and their associated processes.