Estimate how long a position can be held before financing constraints bind.

Family Office Private Wealth Journal · Editorial research desk · 2 November 2026

Companion to The Limits of Arbitrage by Andrei Shleifer; Robert W. Vishny.

Decision in practice

An apparently mispriced asset gets cheaper before convergence, while the family must meet a capital call.

Committee assignment

Test financing duration, loss capacity and withdrawal rights independently of the thesis. A correct valuation is insufficient if the position cannot survive the path.

Record and decision rule

Document time-to-funding failure beside expected convergence. Reduce exposure when the funding horizon is shorter than the plausible holding period.

Illustrative application by the editorial desk. The source authors did not evaluate or endorse this procedure.