First, he's wrong about the money sitting it in a bank account - it is distributed to the LPs (as rfrey says) Second, it doesn't have to be the case; it's just

First, he's wrong about the money sitting it in a bank account - it is distributed to the LPs (as rfrey says) Second, it doesn't have to be the case; it's just that most funds are structured this way. There are funds called evergreen funds, where the proceeds return to the fund and get reinvested.