Hello fund managers! Today, I want to talk a bit about capital calls as a fund manager.
What’s a Capital Call?
Generally, a one-million-dollar fund will not have all that capital on hand. In other words, the investors commit their money to the fund, but it doesn’t leave their bank account until the fund manager “calls” for it.
So, a capital call is when the fund manager requests money promised to them by the investor.
By contract, the investors will always hand over the money when needed.
It’s common for people to miss capital calls because their money gets tied up in other places.
As a fund manager, you need to penalize investors who miss capital calls. Not getting your capital in time could result in missing your deal and losing money.
Conclusion
Today’s blog is short but it’s crucial to understand capital calls as a fund manager.
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That’s it for today!
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author.