Because they are gambling.11. 

They run an illegal gambling ring in one of the company's commercial buildings.

They take gambles if things come in better, worse or on par with expectations.

.: Quote from @JD Martin: Quote from @David Pike: If you invested $100k and then put $19k in for the capital call, you would potentially get your capital call back ($19K) plus 25% of the $100k so $25k.So you're looking at either a $75k loss if you gamble the $19k, a $100k loss if you don't participate and are wiped out, or a $119k loss if you participate but are still wiped out.

I don't defend GPs from this, they gambled and lost LP money competing for these deals with that financing. 

Stay flexible.This approach helps investors move with clarity and speed—without gambling or guessing.Real estate favors the bold—but not the reckless.

If they do not have one then it's gambling money where the pref return and the upside split to LP must be high and the investment amount must be low like 25k or something when net worth is 5 million.

The fact that this sponsor used investor money to gamble on high yield unsecured notes leaves a bad taste in my mouth.  

The same could be said for stock markets - I do not agree that everyone needs to take a test, if someone is worth $1M and wants to gamble $50k they should be able to.

The only down side to being older, in my opinion (other than physical limitations mentioned) is not wanting to gamble on having to start over by making mistakes due to ignorance of laws or a market or being taken advantage of by a bad PM.