Years ago, I was excited by the idea of forming a holding co. I dug in pretty deep, but ended up pursuing deals on a stand-alone basis. I’ve had a few independent conversations lately with folks mentioning similar ideas, which made me revisit my plan. tldr: It's still good
I don’t think you’ve missed this, but you didn’t mention it: What’s the point of investing? Mostly it’s for retirement or to be able to spend it later. If you build a never-sellholding company that’s not publicly traded then you can’t give people that liquidity when they need it
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I’m cool with Berkshire Hathaway never selling and never paying me a dividend because I can sell my shares whenever I want. In a never sell or-model, how do I get money back when I want/need it?
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Also, my model would still generate 15x on invested capital over 20 years with no exit...but, your point is still valid and the lack of liquidity is a major challenge.
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That's true, however I modeled 20 years for the holding period at which point I thought I would likely choose or contractually be required to seek liquidity
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Most PE funds are moving to 25 year lives now Doesn’t mean they plan on holding assets any longer than before (tho some do), just that it’s becoming market
End of conversation
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