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This section describes how to use a private equity workflow for a private equity security with a processing security type of Capital Based Fund Investment (EQCBFI).

Eagle Accounting allows you to track the key components of private equity (PE) investments (total commitment, funded commitment, recallable capital, and unfunded commitment) using the capital-based fund investments (CBFI) functionality. These are the relationships between the fields:

• Capital Call Amount = Cash Amount of Capital Call (LPCALL) + Cost Amount of Initial Funding (LPOPEN) + Cost Amount of Commitment Adjustment (LPCOMMIT)

• Funded Commitment = Capital Calls - Recallable Capital

• Unfunded Commitment = Total Commitment - Capital Calls + Recallable Capital

This can also be simplified to Unfunded Commitment = Total Commitment - Funded Commitment

The system tracks these values for the private equity position. The previous calculations apply to local amounts. The system also tracks base values and derives them using the local amount divided by the current exchange rate.

About Tracking Unfunded Commitment

The system can track both the fund and unfunded commitment for private equity. When you use the Initial Funding Commitment panel, you can enter the commitment amount in a private equity fund. The transaction creates a position in the private equity fund, typically with no cost. There is no cost typically because the investor is committing a specified amount of capital to the investment up front and the private equity fund starts to call for capital from the investor throughout the life of the investment. You can then enter call payments as Funded Capital. Cash distributions from the private equity fund to the investor do not have an impact on the unfunded commitment unless they have recallable capital.

Other Ways to Use Capital Based Fund Investments

When you use Eagle Accounting, it is a best practice to use private equity by setting up a security with a processing security type of Capital Based Fund Investment (EQCBFI). You can also use the Capital Based Fund Investment workflow to model Limited Partnerships and Real Estate in some cases. You can set up a funding commitment, process transactions to fund the commitment, receive distributions, and increase or decrease the commitment.

About Cash Matching and Private Equity Processing

If you process private equity using the capital-based fund investments (CBFI) functionality and additionally use cash segregation for custody holdings to provide a custodian view of transaction activity, Eagle Accounting supports the use of private equity transactions when you match or unmatch actual cash settlements. For more information about cash segregation, see Manage Cash Segregation.