Movement of highs and lows in a portfolio that occur in a company over a specific period. In the context of venture capital, it refers to the investment phase in which the fund decides to divest in a company to reinvest in another with greater growth potential or as a way to obtain capital gains. Such a decision may be due to a need for immediate liquidity of the fund, because managers observe a depletion of the growth potential of the current company, or because they foresee a drop in future sale price, with potential loss of profitability. Portfolio turnover is an important metric for investors in measuring the level of trading activity in a portfolio.
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