Extension Period
An additional time window beyond the base fund term, typically one to two years, allowing the GP to manage and exit remaining investments before final liquidation.
Extension periods require LP consent — either a majority vote or LPAC approval — and are used when market conditions make forced sales inadvisable. Extensions protect LP value by avoiding fire sales during unfavorable markets while ensuring the fund moves toward an orderly conclusion.
Frequently Asked Questions
What is a fund extension period?
An extension period is an additional 1-2 years beyond a fund's base term, allowing the GP to manage and exit remaining investments without forced sales in unfavorable market conditions.
Who approves fund extensions?
Extension periods require LP consent — typically a majority vote of limited partners or approval from the Limited Partner Advisory Committee (LPAC).
Why do fund managers request extensions?
GPs request extensions when market conditions make forced sales inadvisable — protecting LP value by avoiding fire sales and ensuring orderly exits at better valuations.
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