Deployment pace

How quickly an allocation is actually committed - the difference between putting the whole amount to work in one window and spreading it across several years.

Example

Committing $100,000 over four years rather than in a single eighteen-month period.

Important

Pace is a decision, not a residue. Left unmanaged it is set by how fast opportunities arrive, which is not the same as how fast good ones arrive.

Related terms

• Vintage year — The period in which capital was actually committed, which fixes the level of entry prices a position carries for its whole life.
• Dry powder — Capital committed to a strategy but deliberately not yet deployed, held so that a future opportunity can be acted on.
• Time horizon — How long before you plan to spend the money you are investing.

Lessons that explain it

• Ask how the manager gets rich, and whether it requires you to — Fund economics shape manager behaviour. Alignment is strongest when managers commit meaningful personal capital, depend on carry rather than fees, and keep fund sizes suited to their strategy. (10 min)
• Stage, sector and geography: where the spread is real — Portfolios are usually spread along the dimensions that are easy to label rather than the ones that determine whether two holdings fall together. This lesson is about telling the two apart. (11 min)
• Appraising one fund: the manager, the finished track record and the fit — Evaluating a venture fund is mostly evaluating a team and whether their past results came from something repeatable. (14 min)

All 578 terms in the Investing glossary