Capital Calls/ Drawdowns

In our firm, we call it capital calls as usage, we call the funds from the investors so we can use the money for our intended investments. Along with funds for investments purposes we also call the amounts required for the organizational expenses & management fees. These capital calls are called within the commitment (committed by the investor). Some funds treat the expenses & mgmt. fee as outside the commitment.

First client (GP) will send the instructions about his intention to capital call for the investment purpose, then we check the available funds in the fund bank account. When the capital call is for investment, funds are not available generally, also we check whether the funds are sufficient for the fund expenses & mgmt. fee, if not, then we also ask the GP to call for further 2 or 3 quarters of fund expenses & mgmt. fee.

GP will gives approval for the same or he will asks to call for only 1 or 2 quarters of fund expenses & mgmt. fee.

When the GP approves the same, we will start preparation of the workings & notices for the capital call.


Booking the capital call entry (on due date) :

Capital call receivable a/c                       Dr                                         non dominant

            To capital contributions a/c                                                      by commitment & closing dt UDF

             To capital mgmt fee (outside of commitment) a/c                  user provided allocation

             To capital other fee/exp (outside of commitment) a/c            by commitment & closing dt UDF   

 Booking the receipt entry (on receiving date) :

Cash received a/c                                                Dr 

             To capital call receivable a/c

Making investment :

Investment a/c                                                    Dr

              To Cash paid a/c


While sending the notice to investor we will mention following details in the Capital Call notice 

Letter Date on top (date we are sending the notice)

Percentage of commitment we are calling in this capital call

Total capital call amount 

Details of the investment we are making

Bifurcation of the capital call amount like amount we are investing, amount we are using for fund expenses & mgmt fee

Due date (date before which funds are need to deposited into the bank)

Bank account details 


In the 2nd page we will show the break up of the commitment :

Total commitment

Contributions received till now (Prior to this capital call)

Unfunded commitment (prior to this capital call)

Amount of Contributions calling in this capital call

Remaining Unfunded commitment (after this capital call)

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