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Capital call

A notice requiring investors to fund part of their commitment. Also called a drawdown.

Capital call — A notice requiring investors to fund part of their commitment. Also called a drawdown.

Capital calls are governed by notice periods set in the LPA — commonly ten business days for private equity, shorter for hedge funds — and repeated late funding by an LP can trigger default provisions, including forced sale of the LP's interest at a discount in severe cases.

Frequently asked questions

How much notice do investors get before a capital call?

It varies by fund but is set explicitly in the limited partnership agreement — commonly around ten business days in private equity, though hedge funds and other structures differ.

What happens if an investor doesn't fund a capital call?

Consequences are defined in the LPA and can range from interest charges to, in serious or repeated cases, forfeiture or forced sale of the LP's fund interest at a discount.

Nothing on this page is legal, tax, or investment advice. SeRuM is not a registered broker-dealer, not a placement agent, and not an investment adviser.

CommitmentCapital an investor has legally agreed to provide, whether or not it has been called.SubscriptionThe process and documents by which an investor commits to a fund, including eligibility ve Dry powderCommitted capital not yet called — the gap between what investors have promised and what h

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