Capital Waiting, Capital at Work
This essay opens our new Insights series. It sets out the way we think about capital — waiting and working — as the foundation for the reflections and results we will share in the quarters ahead.
Capital does not stand still. Even when it waits, it carries meaning. At Kadoria, we think of capital in two states: waiting and working. Both matter, and both shape value.
Capital waiting lives in liquidity. Too often it is dismissed as idle, yet time gives it weight. At 6% annual return, money doubles in just under twelve years. At 4%, it takes closer to eighteen. At 12%, it takes only a little more than six. What look like small differences in annual return are, in reality, years of time. Time is the true measure of return, and compounding is the rhythm that makes it visible.
Equities remind us of this rhythm with their pace and volatility; bonds remind us with their stability and patience. The S&P 500 in euros, for example, has compounded fast enough over the past decade to double wealth in roughly six to seven years, though never without drawdowns along the way. By contrast, bonds move more slowly, but offer the comfort of contractual cash flows. Neither is complete on its own. Together they frame the benchmarks against which every illiquid decision must be judged.
Capital at work belongs to commitments — in our case, real estate. These projects cannot be sold tomorrow. They demand patience, structure, and alignment. Their value unfolds over years, not days, and their returns must be justified against what liquidity already provides. If liquid markets can double wealth in six or twelve years, an illiquid project must offer more than a number. It must offer clarity of structure, alignment of interest, and the durability to endure across cycles.
The balance between waiting and working is not a trade-off but a relationship. Liquidity offers readiness: the ability to act without haste, when the right opportunity arises. Real estate offers durability: the ability to hold value through time, beyond short-term volatility. One without the other is incomplete. Too much waiting risks stagnation. Too much working risks rigidity. Together, they create both flexibility and conviction.
The lesson is simple, but often overlooked. Compounding translates percentages into years, and years into outcomes. Liquidity makes that passage of time visible. Real estate gives it substance.
At Kadoria, we hold capital in both states — waiting and working. One gives perspective, the other permanence. In their rhythm, long-term value is built. Capital speaks through compounding. If it is not earning at least what liquid fixed income now offers — around 6% — then the structure deserves to be questioned.
October will bring our first quarterly Insights, combining results with reflection. If you wish to follow along, you may subscribe below.