Most funds move through stages: fundraising (commitments, closings), investment period (capital calls, acquisitions), hold (operations, improvements, refinancing), harvest (sales) and wind-down (final distributions, clawback test, dissolution).
The J-curve describes how fees and acquisition costs make early returns look negative before properties mature. Don’t judge a fund by year-one numbers alone, and don’t expect early distributions unless the documents describe them.
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Your journey
More on this stage: Deep Dive: Evaluating a Sponsor’s Track Record · Deep Dive: Tax Basics for Real Estate LPs
Start the next stage: Phase 3: You have decided to invest