A monthly model from in-scope advisors, conversion and ticket size shows why the launch ramp, not returns or redemptions, sets the date.
Build it from advisors, not from a target: in-scope advisors times the share who produce, times tickets per producer, times the average ticket, month by month, then add returns and take off redemptions. In an illustrative evergreen fund with $50 million of seed capital, four tickets a year of $150,000 per producing advisor and platforms that come online over four years, NAV crosses $1 billion in month 42, about 3.5 years after launch. The steady-state shortcut says 19.4 months, less than half the real answer.
Worked in full in The Private Wealth Fundraiser by Julian R. Sterling, with every figure reproduced in a free workbook.See the book on Amazon →
The case is fictional and the levels are illustrative. What matters is the shape: a wealth channel does not switch on, it is assembled platform by platform, and each platform's advisors take time to start writing tickets. The fund opens with $50 million of seed capital, earns a 7 per cent net return a year, and suffers redemptions of 6 per cent of NAV a year once a 12-month soft lock has passed.
| Year | In-scope advisors | Active share | Producing advisors | Gross flows ($m) |
|---|---|---|---|---|
| 1 | 3,000 | 3% | 90 | 54.0 |
| 2 | 7,000 | 5% | 350 | 210.0 |
| 3 | 11,000 | 6% | 660 | 396.0 |
| 4 | 14,000 | 7% | 980 | 588.0 |
| 5 | 15,000 | 7% | 1,050 | 630.0 |
Each producing advisor writes four tickets a year at an average of $150,000. That is the line where most launch plans are too generous: an average ticket of $150,000 is plausible for a private bank, but a platform reaching mass affluent clients through independent advisors will see a lower figure. The book's approach, which the companion workbook for the free Thornbury forecast model runs over eighty-four months, is the same four drivers: in-scope advisors, a conversion curve, tickets per producing advisor and average ticket, with redemptions on aged money.
Annual gross flow is converted to a monthly figure and added to NAV each month, together with the month's return, less the month's redemptions.
Gross flow (month) = in-scope advisors × active share × tickets per year × average ticket / 12
NAV (month) = NAV (previous) × (1 + monthly return) + gross flow − redemptions
Monthly return = (1 + 7%)^(1/12) − 1; redemptions = NAV × 6% / 12 after month 12
Excel, one row per month: =C2*(1+$B$1)+D3-IF(A3>12,C2*$B$2/12,0), then =MATCH(TRUE,INDEX(C:C>=1000,0),0) to find the crossing month.
In year 1 the fund takes in $4.5 million a month. In year 2 that rises to $17.5 million and in year 3 to $33.0 million. The end-of-year NAVs follow:
| End of | Gross flows | Performance | Redemptions | NAV |
|---|---|---|---|---|
| Year 1 | 54.0 | 5.2 | 0.0 | 109.2 |
| Year 2 | 264.0 | 19.2 | 12.4 | 320.8 |
| Year 3 | 660.0 | 53.4 | 42.6 | 720.8 |
| Month 42 | 954.0 | 82.0 | 67.9 | 1,018.1 |
Each NAV line is the $50 million seed plus the three cumulative columns: at month 42, 50 + 954.0 + 82.0 − 67.9 = 1,018.1.
The fund passes $1 billion in month 42, three and a half years after launch. Two features of the path are worth more than the date itself.
First, the answer is almost entirely a gross flow question. At month 42, 93.7 per cent of NAV is money that came in through the channel. Performance added $82.0 million and redemptions took out $67.9 million, a net of only $14.1 million. Over the first three years returns and redemptions nearly cancel, so a team that wants to know when it reaches scale should spend its time on the conversion curve, not on the return assumption.
Second, most of the time is spent in the ramp. The fund takes two years to reach $320.8 million and then needs only another eighteen months for the remaining distance, because by year 4 it is drawing on 980 producing advisors rather than 90.
| Change | Crossing month |
|---|---|
| Average ticket $100k | 51 |
| Base case, $150k | 42 |
| Average ticket $200k | 37 |
| Active share one point lower every year | 46 |
| Every platform goes live one year later | 51 |
| Redemptions 0% a year | 41 |
| Redemptions 10% a year | 43 |
The asymmetry is the point. Moving redemptions from nothing to 10 per cent a year shifts the date by two months. A one-year slip in platform onboarding, which is routine when due diligence, legal review and suitability work at a private bank run long, shifts it by nine. A ticket that averages $100,000 rather than $150,000 does the same. The levers that decide when a fund reaches scale are the ones the distribution team controls least: when platforms say yes, and how large the first allocations are.
Redemptions matter later. A fund whose growth rests on new platforms will see the redemption line catch up with gross flows once the platform count stops rising. The year this happens is a separate question from the year it reaches $1 billion, and the companion page shows why the two peaks are years apart.
The quickest way to answer the question is to take the mature year's gross flow and divide. Year 4 brings in $588.0 million, or $49.0 million a month, so the remaining $950 million should take 19.4 months. That is the number that appears in launch decks, and it is wrong by almost two years, because it applies the conversion of a four-year-old fund to a fund that has just opened. In the first year the real fund takes in less than a tenth of that monthly figure.
A second error is to forecast from a target backwards: decide the fund must reach $1 billion in two years, divide by the ticket, and declare that 6,333 tickets will be written. Nothing in that sum asks whether the advisors exist to write them. Building forwards from in-scope advisors is slower to do and harder to like, but it is the only version that can be checked against what platforms actually deliver.
The same driver logic answers the smaller version of the question in how many advisors it takes to raise $100 million, and the gap between gross flows and growth is set out in why gross flows keep rising while the growth rate falls.
Time to $1 billion is set by the onboarding calendar and the ticket size, not by returns or redemptions. Model it monthly from in-scope advisors, put the platform go-live dates in as inputs, and treat any answer that uses mature-year flows from launch as a ceiling on speed rather than a forecast.
Gross flows, which come from four drivers: in-scope advisors, the share who produce, tickets per producing advisor and average ticket. In the illustrative case, gross flows account for 93.7 per cent of NAV at month 42, while performance of $82.0 million and redemptions of $67.9 million nearly cancel. Onboarding dates and ticket size therefore matter far more than the return assumption.
Less than most teams expect in the first years. In the illustrative fund, moving annual redemptions from 0 per cent to 10 per cent of NAV shifts the crossing from month 41 to month 43. Redemptions bite later, once the number of platforms stops rising and gross flows level off, which is a different question from the date the fund first reaches scale.
It divides the remaining distance by mature-year flows, here $49.0 million a month, giving 19.4 months. A new fund has few platforms and few producing advisors: in year 1 the illustrative fund takes in $4.5 million a month. Applying mature conversion from launch understates the time to $1 billion by more than half, 19.4 months against 42.
This article is one calculation from The Private Wealth Fundraiser. The book takes the same case from first principles to the decision, chapter by chapter, and every figure it prints is a live formula in the free companion workbooks.
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