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).
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This can also be simplified to Unfunded Commitment = Total Commitment - Funded Commitment
WRITERS NOTE: HB to confirm Capital Call Amount formula
CARDIA COMMENTS: We should mention that these values are tracked for the position. The calculations above are for local amounts which we should specify. Base values are also tracked and are derived 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 Intial Initial Funding 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 are have recallable capital.
Other Ways to Use Capital Based Fund Investments
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