A subscription line of credit (SLC) is debt issued to a private equity fund and used on a continuing basis. Using new data on U.S. buyout funds, we show that when funds use subscription lines of credit they call less capital. We find that funds using SLCs have substantial distortions in...

Extending from Lerner and Schoar's (2004) fund manager's perspective for illiquidity puzzle of the private equity fund, we take the investor's perspective. This paper examines the roles that investment illiquidity, along with bounded rationality of the fund managers and rent-seeking behavior in...