Capital Contributions - Fund Accounting 101

Capital contributions to the fund are the first concern. How capital comes into the fund and how it is tracked will be important for distributions, capital calls and audit purposes. If there are multiple share classes, general partners and limited partners, multiple dividend rates or legacy investors assigned into the fund, all this needs to be coded and tracked at the outset for accurate payments and financial reporting. Does historical activity need to be maintained to account for break points and thresholds? Will investors receive warrants and how will they need to be tracked? Will in-kind contributions be accepted? If so, how will any excess value be allocated? Will the investor be treated differently in any way? Will the general partner be allocating carried interest into the fund? Might the manager be paid in equity rather than cash for consulting fees, management fees, or other services? Are there different distribution terms for different categories of investors, perhaps all the investors with a given custodian? Are there side letters? What provisions are in place in the event of deaths, divorces and other upheavals among investors going forward?

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#Fund Accounting 101