Liquidity in Private Markets — What Investors Need to Know
Private market investments are illiquid by nature. Unlike public stocks, you cannot sell your position on an exchange at any time. Understanding liquidity expectations before you invest is essential. Most private market investments have hold periods of 5–10 years before a liquidity event.
Expected Hold Periods
Venture capital investments typically have holding periods of 7–10 years. Private equity may range from 5–8 years. Real estate and credit products may have shorter timelines of 2–5 years. These are estimates, not guarantees — actual timelines may be shorter or significantly longer.
Secondary Market
Dhow is building a secondaries capability that will allow investors to list their positions for sale to other qualified buyers. However, secondary sales are not guaranteed and depend on buyer demand, pricing agreement, and compliance with transfer restrictions in the offering documents.
Liquidity Events
Full return of capital generally occurs only upon a liquidity event such as an IPO, acquisition, or fund wind-down. Some fund structures may offer periodic distributions before the final exit. You should not invest money you may need in the short or medium term.
Frequently Asked Questions
When can I get my money back?
The timeline depends on the product type. Venture capital investments typically have holding periods of 7–10 years. Private equity may range from 5–8 years. Some fund structures may offer periodic distributions before the final exit, but full return of capital generally occurs only upon a liquidity event such as an IPO, acquisition, or fund wind-down.
Are redemptions guaranteed?
No. Redemption programs, where they exist, are typically subject to board or manager approval and may be limited to a percentage of NAV per quarter. Redemption requests may be delayed, partially filled, or denied entirely depending on fund liquidity and the terms of the offering. Redemption is never guaranteed in private markets.
Can I sell my position early?
In some cases, yes — through secondary market transactions. Dhow is building a secondaries capability that will allow investors to list their positions for sale to other qualified buyers. However, secondary sales are not guaranteed and depend on buyer demand, pricing agreement, and compliance with transfer restrictions.
What fees apply to selling on the secondary market?
Secondary transactions may involve transfer fees, administrative fees, and potential discounts to NAV. Specific fee schedules will be disclosed per offering and at the time of any secondary listing.
What is the expected timeline for liquidity events?
Liquidity events vary by investment type. Venture capital exits (IPO or acquisition) typically occur 7–10 years after investment. Private equity exits may occur in 5–8 years. Real estate and credit products may have shorter timelines of 2–5 years. These are estimates, not guarantees.
What happens if there are no buyers for my position?
If there are no buyers, you will need to continue holding the position until a liquidity event occurs or buyer demand materializes. There is no guarantee that a secondary buyer will be available at any given time. This is one of the fundamental risks of private market investing.
Who sees my identity in a secondary sale?
Identity disclosure depends on the structure and regulatory requirements of the transaction. In most cases, the buyer and relevant compliance parties will need to verify identities for KYC/AML purposes. Dhow aims to minimize unnecessary identity exposure while meeting all legal requirements.