photo credit:  Mike van Schoonderwalt / Pexels

Key Takeaways

• Private fund investors typically commit a specific amount of capital upfront but may contribute that money over time as the fund makes investments and incurs expenses.
• A capital call is a formal request for part of an investor’s committed capital, and the general partner must follow the procedures established in the fund’s governing documents.
• Before issuing a capital call, the general partner typically reviews the fund’s available cash, upcoming investments, expenses, reserves, and other funding requirements to determine the appropriate amount and timing.
• A clear capital call notice gives investors important information such as the amount due, payment deadline, purpose of the request, previous contributions, and remaining unfunded commitment.