An LP tender offer can give LPs liquidity without generating a euro of fund-level DPI.
A new investor buys interests from existing LPs. Liquidity passes from the buyer to the selling LPs, not through the fund.
For GPs, the practical question is: who needs the liquidity? If individual LPs need an exit, a tender may fit. If the fund needs distributions to improve DPI or support its next raise, it will not.
In the latest EUVC Academy masterclass, Kristaps Ronis, Partner at Ion Pacific, shows how to apply that test before choosing a liquidity structure.
Only the ownership changes
In an LP tender offer:
Selling LPs receive liquidity from the new investor.
The portfolio and existing fund structure remain intact.
Fund-level DPI remains unchanged.
“LP tender offers solve an LP liquidity problem. They do not solve a GP DPI problem.”
When an LP tender fits
This structure is most useful when:
Some LPs want to exit while others want to remain invested.
The GP wants to provide liquidity without restructuring the fund.
The GP wants to reshape its LP base by bringing in a new institutional investor.
But if the GP needs to return capital from the fund or strengthen its distribution story ahead of its next raise, an LP tender solves the wrong problem.
LP liquidity pressure and GP fundraising pressure can look similar from the outside. Choosing a structure simply because it creates “liquidity” can result in a well-executed process that addresses the wrong constraint.
Across the Academy session, Kristaps maps six fund-level liquidity structures to the problems they solve. He also covers buyer expectations, pricing, governance, timing and the process mistakes that can derail a transaction.
You will leave better equipped to determine whether your fund needs more time, LP-level liquidity, fund-level DPI or a cleaner exit path before committing to a structure.
A practical guide to choosing the right liquidity structure
Prefer a quick reference? Our free VC Fund Liquidity Playbook compares all six structures and their trade-offs.
