Fund investors exercise a certain pressure on fund managers to quickly deploy the capital committed to funds. The rationale is that if they do, the performance drag from idle cash will be reduced. Under pressure, fund managers might have less freedom to select the best opportunities over time.

The evidence shows that managers of US LBO funds of vintage years (VY) 2000 to 2010 have been deploying more capital in the first year (29%) than during each of the following ones. Years 2 and 3 are roughly at par (20%) and amounts decline after that rather regularly and rapidly.

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