Capital calls and distributions
Where LP money goes missing: capital calls, distributions, and who pays when they go wrong
This hub follows money as it moves between investors and a fund: what an investor owes when a call arrives, what a manager can take if it is missed, and what is paid out and when. Each piece asks what happens, who pays, and what the figures on the statement really mean.
What readers ask
- Are capital calls mandatory?
- What triggers a capital call?
- What happens if you don't respond to a capital call?
- Are capital calls legally binding?
- What does "return of capital recallable" mean?
- What is a subscription line of credit in private equity?
In preparation
- The ten-day window, and what happens to an LP who misses one
- The remedy ladder: what a GP can take from an LP who defaults, rung by rung
- The late LP's bill: how equalisation interest moves money between investors at a subsequent close
- Recallable distributions: the money you received that isn't yours yet
- Paid the fraudster: what happens to an investor whose capital call money reaches the wrong account
- Five lines on your capital account statement that decide what you are really owed
- GP catch-up: the clause that decides when your profits start becoming the GP's
- European or American waterfall: who carries the risk when the last deal goes wrong
- Dry powder or unfunded commitment: the liability sitting on every LP's balance sheet
- How a bank loan makes a fund's IRR look better than its cash
- What a fund administrator's fee actually buys, and the questions that make it good value
- When your GP changes fund administrator: what an LP should ask, and whether it gets a say
Data and tools in preparation
- DataCapital call notice periods