Recycling lets a fund reinvest proceeds from early sales instead of paying them out, usually up to a stated limit.
What the film says
In private equity, a fund can invest more than it raised. It's called recycling. Say a fund has one billion committed. Early on, it sells a company for a hundred and fifty million. Normally that goes back to investors. If the terms allow, it can be reinvested instead. Usually only up to a stated limit. So why do investors care? The manager gets more capital to work. And investors wait longer for cash back. Money that could have come back goes around again.
In the glossary: Recycling
A simple example with round numbers, not advice. Terms vary by fund.
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