Permanent capital

Permanent capital — a capital base that investors cannot redeem: a corporation’s balance sheet, insurance float, a closed-end structure. Its owner can allocate through panics without forced selling, which is the structural precondition for running capital allocation as the business itself (Buffett, Singleton, the PH holdcos). The opposite: an open-end fund whose investors can flee at the bottom, forcing the manager to sell exactly when buying is right.

First used in: 5.2 · The ten breakthrough patterns