However, since VC partnerships mostly make long-term equity investments, most of their profit is long-term capital gain.

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Mr. Wang said long-term investments, including direct investments, private equity, infrastructure and real estate, now account for more than half of the fund's global portfolio, with the rest in public-market securities.

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This decision to target customers that were focused on long-term results enabled Baupost to distinguish itself from private equity firms that would sell winning investments quickly in order to justify the high short-term performance they needed to raise more capital from investors.

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