Process a Cash Distribution for Private Equity

WRITERS NOTE: need sample data for screenshot example

In the Capitalization/Cash Entry/Final Close panel, you can process a cash distribution from a private equity fund. A Cash transaction (LPCASH event) lets you record cash paid or received. There are two types of cash distributions:

• Recallable. Cash is paid out to limited partners (LPs), but can be either fully or partially recalled by the general partner (GP) at a later date. This decreases the funded commitment and increases the unfunded commitment.

• Non-Recallable. Cash is paid out to LPs permanently. This does not affect the funded commitment or unfunded commitment.

You can also use cash distributions to include income/expense for the commitment. You can specify a receivable/payable event type for the expense rather than create a separate miscellaneous expense transaction.

The LPCASH event is part of the Capital Based Fund Investment workflow used when you set up a private equity security with a processing security type of Capital Based Fund Investment (EQCBFI).

To book a cash distribution for private equity using the Book Trade tool:

1. In Accounting Center, in the left navigation pane, click Transactions > Trades > Book Trade/Rebook Trade > Book Trade. 
   You see the Book Trade workspace.

2. Complete the options in the Search Details pane and click Search.
   You see the search results based on the criteria you selected.

3. Select the row with the private equity security with holdings you want to update.

4. On the Book Trade tab, in the Actions group, click Action Rules, point to Other, and then click Capitalization/Cash Entry/Final Close.
   You see the Capitalization/Cash Entry/Final Close panel.

5. In the Entity Information section and the Issue Information section, identify the entity and security for the private equity position that you want to update.

6. Under Capitalization/Cash/Close Information, set Transaction Name to Cash.
   You see the fields that apply to a Cash transaction. You can view the commitment amount for the private equity fund.
   

7. Under Local Values, in the Local Cash Amount field, specify the local amount of the cash distribution.

8. You can specify values for income, expense, cost, and recallable capital as needed.
   If the settlement currency differs from the asset currency, you can specify a settlement cash value. If you enter an income/expense amount, you can also identify the corresponding account number. The system calculates the gain/loss amount and base value amounts.

9. Under Other Information, in Transaction Notes, select a reason for the transaction

10. Complete the remaining options on the Capitalization/Cash Entry/Final Close panel.

11. Click Submit to process the cash distribution.