Perpetual fund

Subject :Economy

The IVCA expert committee asked the government to allow perpetual capital vehicles in order to unlock capital flows from long-term investors.

Concept:

Perpetual fund

It is also referred to as an endowment fund
It consists of a sum of money gifted to a charity by a donor who wishes to provide it with a never-ending source of revenue.
The fund is usually named in memory of loved ones or after the donors themselves.
By using only the interest income and never reducing the capital portion of the fund, a charity is assured that a certain amount of support will come its way year after year.

A perpetual capital vehicle

It is a type of investment where capital available or permanent capital is managed for an unlimited period of time.
Under it the funds do not come with the drawdowns, capital calls, exit deadlines and other traditional features of the PE-VC funds that have a fixed fund cycle or life.
Permanent Capital Structures Examples
- Real estate investment trusts
- Master limited partnerships
- Companies that operate, own or finance income-producing real estate and are modeled after mutual funds
- Limited partnerships traded publicly on an exchange
- Yield cos (companies structured in a way that their operating assets product long term contracts produce steady cash flow)
- Public assets management companies
- Interval fund ( a type of closed-end fund not trading on the secondary market)
- Variable funds such as life insurance and annuities.
- Closed-end funds (a mutual fund type)