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 uncalled capital?
This financial statement explains the movement from beginning net assets to ending net assets during the period.
What is the Statement of Changes in Net Assets?
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?
This document formally requests that LPs fund a portion of their commitments.
What is a capital call notice?
This schedule typically presents individual investments along with information such as cost and fair value.
What is the Schedule of Investments?
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)?
This performance metric measures total value generated relative to invested capital, without considering the timing of cash flows.
What is MOIC?
This term describes a distribution that, under the governing agreement, may later be called again by the fund.
What is a recallable distribution?
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.
A financial statement amount differs from the corresponding amount in its related footnote. This is an example of this type of review issue.
What is a disclosure inconsistency?
In private credit, this term describes a loan with the highest contractual priority claim on a borrower's collateral.
What is 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?