Glossary

Fund Term

Also known as: Fund Life

The stated life of a closed-end fund as set out in its limited partnership agreement, spanning from initial closing through final liquidation, typically structured as an investment period followed by a harvest period and one or more optional extension periods.

Value-add and opportunistic real estate funds commonly run eight to twelve years including extensions, while debt funds and core-plus vehicles are often structured with shorter terms reflecting their faster capital turnover. The fund term embeds an implicit exit-timing assumption into every asset the manager acquires: a fund approaching the end of its stated term without an approved extension faces pressure to sell remaining assets regardless of whether market conditions are favorable, a liquidation risk that is distinct from — and can compound — the underlying real estate's fundamental risk. Extending the fund term beyond what was originally stated typically requires approval from the fund's limited partner advisory committee or a majority vote of investors, a governance check intended to prevent a general partner from unilaterally prolonging a fund's life primarily to preserve management fee income.