Your idle capital isn’t on PTO

Hi ,

I just took some much needed downtime. 

I spent this past weekend in Breckenridge with our partners from Aspen Funds. We skied during the day, cooked dinner at Bob Fraser’s place, and spent the rest of the time doing what inevitably happens when you put a few fund managers together: sharing their best deals. 

My favorites didn’t seem to fit a clear pattern. There were funds across asset classes like real estate, oil & gas, and private credit, all with different IRR profiles, hold periods, cash flows. Then, it suddenly dawned on me what tied them together. These funds all compound within the fund itself. They maximize capital deployment ensuring my investment never sits idle.

Unlike me, I don’t think my money should get a nap apres ski. 

I’ll be the first to admit it — I love a high IRR. I love the quick return of capital. I love IRR’s elegance and efficiency. 

IRR tells us how much return we had relative to duration, but there’s a variable IRR that doesn’t capture very well: the time your capital spends between deployments. 

Most people deploy into syndications holding the returns from Deal A until they find Deal B. This creates meaningful capital downtime. 

Conversely, research shows structures that keep capital continuously invested tend to compound more efficiently over time, all else equal.

Not because the deals are better.
Not because the managers are smarter.
But because idle time is minimized.

That idea stuck with me.

It also helped crystallize a framework I’ve been advocating but haven’t named explicitly until now: Continuous Capital Funds.

In simple terms, these are fund structures designed so your capital stays working.  Either by being invested immediately and managed continuously, or by being redeployed across multiple projects over the life of the vehicle instead of returning to you and waiting for the next decision.

There are different ways to design these funds. Some are open-ended. Some are closed-end but built for continuity. 

And once you see it, you’ll start noticing it everywhere.

This week we are talking about how consistently your money is actually working: 

• How capital velocity is a bigger deal that many investors realize.

• The different ways continuous capital shows up in actual fund design.

• Ultimately, a playbook on how to identify these funds, evaluate them, and place them. 

Let’s dive in,

— Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

SHIFT YOUR STACK

How Downtime Kills Compounding

Most private investors learn to evaluate opportunities by looking at outcomes.

IRR.
MOIC.
Cash yield.

Those metrics matter. We use them constantly.

But they assume something that isn’t always true in practice: that your capital maintains velocity.

That assumption deserves a closer look.

Typical outcome measures show how well capital performs once deployed.
Capital velocity shows how often it actually gets the chance.

In private markets, that distinction carries more weight than most investors realize.

The hidden gap between commitment and compounding.

In many private investments, there’s a gap between the moment you decide to invest and the moment your capital is fully working.

It’s an instinct. You invest, wait for an outcome, receive capital back.  Then you face the question of where it goes next.

And that gap shows up in familiar ways:

• Capital sitting in cash before deployment

• Capital returning to you and waiting for redeployment

• Capital working in bursts rather than continuously

None of this reflects poor execution. It’s structural.

Over time, those gaps reduce the amount of actual compounding your capital experiences, even when headline returns look attractive.

That’s where structure starts to matter.

What we mean by Continuous Capital Funds

Well first, a Continuous Capital Fund isn’t a promise of higher returns.

It’s a design choice.

These fund structures are built to keep capital working. By deploying it quickly or by reinvesting it across multiple projects within the same vehicle rather than returning it and restarting the process.

Whether open ended (evergreen) or closed ended, the broader principle is continuity of capital behavior. Basically it’s how money moves once it’s inside the structure.

The objective isn’t to perfect a single metric.
It’s to increase the consistency with which capital gets deployed.

Two ways continuity shows up in practice

There are two primary ways this design shows up.

1. Evergreen Funds (open-ended continuity)

Evergreen funds are structured so investors gain exposure upon entry and capital is managed continuously inside the fund. Think diverse portfolios of shorter term debt.

Common characteristics include:

• Entry at fair value

• Capital deployed upon investment

• Ongoing portfolio management rather than one-time deployment

• Liquidity managed at the fund level rather than by the investor

Some evergreen funds maintain liquidity buffers. Others operate with more limited liquidity. The specific profile matters less than the intent: capital is managed continuously rather than repeatedly stopping and restarting.

2. Reinvestment Funds (closed-end continuity)

Reinvestment funds are closed-end vehicles designed so capital doesn’t follow a single, linear path. Often this is a long term, multiphased project, where the success of each phase helps bolster the next.

Instead of deploying once and waiting for a terminal outcome, these funds:

• Allocate capital across multiple projects over time

• Redeploy capital under predefined rules

• Maintain exposure through multiple phases of value creation

From the investor’s perspective, capital stays inside the vehicle and continues compounding without requiring a new decision every time proceeds are generated.

The structure is closed-end.
The capital behavior remains continuous.

What the research actually suggests about returns

Research comparing continuously deployed structures with more episodic deployment models has shown a pattern worth paying attention to: when capital spends more time at work, realized outcomes can improve.

That doesn’t imply better deals or superior managers. In many cases, the underlying investments look similar.

The difference comes from mechanics:

• Less time waiting between deployments

• Fewer reinvestment gaps after realizations

• Fewer pauses driven by capital-raising cycles

Even at identical deal-level returns, time at work matters.

When sponsors don’t have to stop and raise new capital for each investment, they can maintain momentum and avoid missing opportunities during fundraising pauses. It’s a small edge, but one that adds up over time. That continuity can reduce missed opportunities that arise during fundraising windows. It's a subtle factor, but one that compounds over long horizons.

Now, this doesn’t guarantee better results, but it explains why continuity can matter.

Different approaches are built to do different jobs.

Continuous capital structures tend to:

• Reduce idle time between deployments

• Smooth the compounding path

• Lower the cognitive and operational burden on the investor

Other approaches emphasize selectivity, precision, or concentration. Those tradeoffs are often intentional and appropriate.

View It Through The Lens of Capital Velocity

Viewing private investments by how capital moves changes what you notice, and familiar patterns start to look different.

Two investments with similar returns can feel very different to own because of how consistently capital is allowed to compound along the way.

At a certain scale, investing becomes less about finding the next great deal and more about designing a system that compounds with fewer interruptions. Taking a healthy investment across 10 years with continuous deployment is a smooth ride to a higher return.

That’s the framework to start considering if you want to see efficient compounding and minimal interruption.  

Want to go deeper? Check out our research report on investment efficiency in these models HERE.

CASE STUDY

Continuous Capital At Work: Two Funds. Two Different Structures. 

Continuous capital isn’t a theoretical construct. It shows up clearly once you look at how different funds are designed to behave over time.

Outlined here are two real-world examples from our own portfolio offerings. The first is  open-ended and the second is closed-ended They apply the same philosophy through very different structures.

BuildFlow I: Evergreen Credit as Continuous Capital

BuildFlow I is an open-ended, diversified private credit fund. Its structure exists for a specific reason: to keep capital working consistently while reducing the friction investors typically face between deployments.

Capital is deployed into real estate-backed private credit strategies and managed continuously inside the fund. Because the vehicle is open-ended, capital goes to work upon investment rather than waiting for staged closings or future allocation decisions.

That design shows up most clearly in how the fund behaves:

• Capital is deployed promptly rather than episodically

• Cash flows are generated regularly rather than back-ended

• Liquidity is managed at the fund level instead of by each investor

In Q4’25, BuildFlow delivered its strongest performance of the year, exceeding a 12% annualized return. The result shows capital was deployed, is working, and producing income in real time.

As capital has flowed aggressively into upper-middle-market business credit, BuildFlow’s focus on real estate-backed lending has remained resilient. That positioning has allowed capital to stay productive and conservative, even as competition increased elsewhere.

The advantage came from structuring capital to deploy and remain active while others were still waiting.

As a Continuous Capital Fund, BuildFlow is designed to function as ballast. Reducing idle time, smoothing compounding, and allowing investors to maintain exposure without constant reinvestment decisions.

BuildLegacy I: Reinvestment Real Estate as Continuous Capital

BuildLegacy I applies the same continuity principle but through a different structure.

It is a closed-end commercial real estate fund with a long-duration horizon focused on the Central West End of St. Louis, MO. To date, the fund has acquired 11 properties — all assembled in a short period. A footprint that took the prior owner more than four decades to build, — but now is the largest commercial real estate owner in the neighborhood.

BuildLegacy is a Continuous Capital Fund designed to move over time.

Rather than deploying capital once and waiting for a terminal outcome, BuildLegacy is structured to:

• Rehabilitate and reposition existing assets

• Develop where the neighborhood supports it

• Continue acquiring strategically over the life of the fund

Capital doesn’t complete its work after the initial purchase. Value created in one phase feeds the next — acquisition into rehab, rehab into operations, operations into development — all within the same vehicle.

The structure is closed-ended.
The capital behavior remains continuous.

Over a decade-long horizon, that continuity matters. It allows investor capital to remain exposed to neighborhood-level transformation rather than resetting between individual projects or transactions.

One philosophy, two implementations

BuildFlow I and BuildLegacy I look very different on the surface.

One is open-ended credit.
The other is long-duration real estate.

But both are built around the same core intent: to reduce idle time and keep capital working across a greater portion of the investment lifecycle.

The difference lies in how continuity is achieved  and how each should be evaluated. 

Open-ended continuity emphasizes deployment speed, cash-flow behavior, and liquidity management. Reinvestment continuity emphasizes capital recycling, long-term exposure, and disciplined allocation across phases.

THE PLAYBOOK

How to Evaluate—and Place—Continuous Capital Funds

Continuous Capital Funds aren’t meant to replace every other investment you make. You want to know what to look for, which metrics actually matter, and where each belongs alongside syndications or any other private holdings in a well-constructed stack.

The funds exist to solve a specific problem: keeping capital productively engaged over time without forcing you to manage timing, liquidity, and redeployment decisions yourself.

Step 1: Identify the type of continuity

Start with structure, not returns.

Remember, Continuous Capital Funds generally fall into two categories.

Evergreen (open-ended continuity): Capital that stays invested and adapts over time.

Designed so capital is deployed upon entry and managed continuously inside the vehicle.

These structures work well when the goal is simplicity, consistency, and reduced reinvestment friction.

Reinvestment (closed-end continuity): Capital that compounds across phases. 

Here the capital doesn’t follow a one-time deployment path. Instead, it’s redeployed across multiple projects or stages under predefined rules.

These structures work well when the goal is long-term compounding within a defined strategy, geography, or theme.

Step 2: Evaluate continuity relative to what you could do yourself

This is the most important step. And it’s easy for investors to skip.

Don’t worry about perfection. The right benchmark for a Continuous Capital Fund is realism.

Start by asking yourself:
If I managed this capital on my own, how consistently would it actually be deployed?

Most investors face real constraints:

• Gaps between opportunities

• Capital sitting idle while waiting for the next decision

• Uneven reinvestment discipline

• Liquidity choices driven by personal timing rather than portfolio design

Knowing your answer, focus on whether the structure solves problems you’d otherwise have to manage yourself.

For Evergreen funds this will mean determining:

• Time to deployment: How quickly does capital typically go to work — and why not faster?

• Capital-at-work range: What portion is usually deployed, and how does that shift in volatile markets?

• Distribution cadence: Monthly, quarterly, automatic, or discretionary — and how that rhythm affects capital behavior.

• Liquidity design: Redemption terms, gates, and buffers.

• Risk posture: What protects capital when conditions tighten?

For Reinvestment Funds, the key questions include:

• How explicit are the rules governing reinvestment?

• Who decides when capital moves to the next phase?

• Are there guardrails on concentration and pacing?

• Does reinvestment reinforce good decisions  or amplify weak ones?

The goal isn’t constant motion.
It’s intentional continuity.

Step 3: Place it correctly in your stack

Continuous Capital Funds tend to sit at the foundation of a private-market portfolio.

For readers familiar with the Wealth Pyramid, this is the base layer.

They provide:

• Stability

• Consistency

• Capital that stays productive while other layers do more episodic work

A simple way to think about placement:

• Evergreen continuity often functions as ballast

  • Core exposure

  • Smoother compounding

  • Fewer reinvestment decisions
    

• Reinvestment continuity often functions as long-horizon growth

  • Concentrated exposure to a theme or geography

  • Compounding across phases

  • Fewer reset points

Above that base, you can then layer:

• Deal-by-deal investments

• Opportunistic syndications

• Higher-variance, higher-selectivity bets

The portfolio works because not every dollar is tasked with the same job.

Here’s a simple rule of thumb

If you want capital that works steadily, absorbs volatility without constant action, and frees you up to be selective elsewhere then continuity belongs at the base.

If you want capital that targets specific opportunities, accepts episodic deployment, and trades consistency for precision then you layer it on top of your stack. 

That’s how strong individual investments turn into a durable stack.

WEALTH STACK REBELLION

“The essence of strategy is choosing what not to do.”
— Michael Porter

Most investors worry about what they should DO.

What to buy.
When to exit.
Which deal looks best right at this moment .

They obsess over their decisions.
The what and the when, seeing capital is a faucet you can turn on and off.

But capital shouldn’t be about start and stop. It’s a constant machine. And most of the time, it’s idle, waiting to prove its potential.

The rebellion is to stop obsessing over individual moves. Start obsessing over movement itself.

Think about capital velocity. About continuous deployment. Structures that keep money working even when you aren’t making a decision. Compounding that actually compounds.

Look to funds and frameworks where idle capital doesn’t exist. Where every dollar has a job at all times.

Less time chasing outcomes and more time chasing flow.

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