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Commitment
Capital an investor has legally agreed to provide, whether or not it has been called.
Commitment — Capital an investor has legally agreed to provide, whether or not it has been called.
A commitment is a legal obligation, not a cash transfer — the capital sits with the investor, earning their own return, until the manager actually calls it, which is why committed-but-uncalled capital is tracked separately from invested capital in fund reporting.
Frequently asked questions
What's the difference between a commitment and invested capital?
A commitment is the total amount an investor has legally agreed to provide; invested capital is the portion actually called and deployed so far — the gap between them is dry powder.
Can a commitment be reduced or cancelled?
Only in specific circumstances defined in the LPA, and typically not simply at the investor's discretion once signed.
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.
Related
Capital callA notice requiring investors to fund part of their commitment. Also called a drawdown.Dry powderCommitted capital not yet called — the gap between what investors have promised and what hSubscriptionThe process and documents by which an investor commits to a fund, including eligibility ve
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