A fund that raises capital before its specific assets are identified, so LPs commit based on the sponsor's track record and strategy rather than a known portfolio.
Related terms
- Capital call
A formal notice requiring an LP to wire a portion of its committed capital by a set date; missing one triggers default penalties that can dilute or forfeit the…
- Capital contribution
Money an investor actually pays into a fund or deal against its total commitment, usually made in instalments as the sponsor draws it down.
- Capital growth
The portion of total return from an increase in an asset's value over time, independent of the income it produces.
- Capitalisation rate (cap rate)
The ratio of net operating income to value; a lower cap rate implies a higher price for the same income.
- Cash-on-cash return
Annual pre-tax cash flow divided by the equity invested.
- Clawback
A provision requiring the sponsor to return promote it was paid earlier if later losses mean the LPs did not ultimately receive their agreed preferred return.
- Closed-ended fund
A fund with a fixed life and committed capital raised in a defined window, deploying then exiting assets over a set term — the standard structure for value-add…
- Co-investment
An opportunity for an LP to invest additional capital directly into a specific deal alongside the fund, usually at reduced or no fees and promote.