Fund Lifecycle
This stage of a private fund's lifecycle is when capital is actively deployed into portfolio companies.
What is the Investment Period?
The portion of an investor's commitment that has not yet been contributed to the fund is known by this term.
What is unfunded commitment?
Public companies generally must file this SEC form annually, which includes audited financial statements and management’s assessment of internal control over financial reporting.
What is Form 10-K?
This procedure compares amounts presented in the financial statements to their underlying supporting schedules.
What is a tie-out?
This party generally provides capital to a private fund but does not participate in its day-to-day management.
What is a Limited Partner (LP)?
IPOs, strategic sales, and recapitalizations are three potential methods used during this stage of the fund lifecycle.
What is the Harvesting / Exit Phase?
What is the difference between a subscription agreement and a capital call notice?
Subscription agreement establishes the investor's commitment to the fund.
Capital call notice is the fund's formal request for the investor to actually fund part of that commitment.
On the Statement of Investments, securities are commonly grouped by this characteristic to help users understand the fund’s exposure to different parts of the economy.
What is industry or sector classification?
This reconciliation explains how a balance moves from its beginning amount to its ending amount through current-period activity.
What is a rollforward?
This party is generally responsible for managing the fund and making investment decisions on its behalf.
What is the General Partner (GP)?
For a new private investment fund, name at least two events that would trigger a commencement of operations for the fund.
What are:
This service provider maintains a public fund’s official shareholder and share records and performs functions related to the issuance and transfer of shares.
What is the transfer agent?
Financial Highlights: Explain the purpose of this footnote & provide examples.
To provide key performance indicators for the fund, such as total return, IRR, net expense and incentive allocation, and net investment income.
What is an integrated audit?
An audit in which the auditor performs both an audit of the financial statements and an audit of internal control over financial reporting (ICFR) as part of the same engagement.
In private credit, this term describes a loan with the highest contractual priority claim on a borrower's collateral.
What is senior secured or first-lien debt?
Unlike MOIC, this performance metric incorporates the timing of a fund's cash flows.
What is IRR?
Parallel Fund: Explain what this structure is designed to do.
Allow separate funds to invest alongside one another in substantially the same investments, often to accommodate different investor requirements.
Level 3 Fair Value: Explain what distinguishes this classification within the fair value hierarchy.
The valuation uses significant unobservable inputs.
Comparing current-year balances and activity to prior periods to identify unexpected movements is commonly referred to by this type of review procedure.
What is analytical review?
This contractual provision in a credit agreement requires the borrower to meet or maintain specified financial or operating conditions.
What is a covenant?
Carried Interest: Define this term in the context of a private investment fund.
What is the GP's share of fund profits, generally earned after specified return requirements are met?
This entity is inserted into an investment structure to prevent certain tax attributes of an underlying investment from flowing directly to particular investors.
What is a blocker entity?
During a financial statement tie-out, auditors should agree not only numbers, but also this other type of information throughout the financial statements.
What are words / textual disclosures?
During review of the Statement of Cash Flows, capital contributions and distributions should tie back to this financial statement.
What is the Statement of Changes in Partners’ Capital (SCPC)?
This term describes an investment on which the lender has stopped recognizing interest income because collection is uncertain.
What is a non-accrual investment?