Paid In Capital, Committed Capital, Invested Capital, Total Capital, capital called down How to keep track of all that? Committed Capital: Capital that an investor in a private equity fund has committed to investing ?? Invested Capital: amount that the private equity company has invested in portfolio companies ??
no idea but the DPI vs RVPI i wanted it to be the R in realized is the RVPI, but it’s the exact opposite. so i just remember it being the opposite. the R one is unrealized and DPI is realized. i’m sure these kind of reverse psychology retarded whatever they are tricks i’ll get backwards and forget by test date.
Committed Capital is typically the amount that a given investor has committed to provide to a PE fund over its life. However, this number could also be stated from the PE Fund perspective. For example, a fund (or General Partner) could state, for example, that he has so far called X% of all of the committed capital, that is the aggregate of all LPs capital committments. Paid in capital is from the investor perspective. Investors commit to provide a certain dollar amount over the life of the fund. The General Partners calls this capital as he needs it. So, if a general partner has, for example, called 25% of committed capital, and I have committed $10 million, then my paid in capital at that point is $2.5 million Invested Capital - This is from the investor standpoint, how much has this investor paid in, or put another way, how much of a specific investor’s capital committment has been called by the fund (stated in dollars). Capital Called Down - the General Partner calls capital as he needs it. So, opportunity arises, he needs $100 million dollars, he calls the same pro-rata share of committed capital from each investor that he needs to get that $100 million. This number is cumulative. Neither the CFA or Schweser books spends a whole lot of time on the structure of PE funds so this can get confusing. Keep this in mind - each investor commits to provide a specific dollar amount over the life of the fund. Fund lives are typically 10 years or so, but all of the capital is usually called in the first 5 years, second 5 years is spent nurturing the investment and then exiting and returning investors capital + profit (hopefully!). The GP calls the capital as needed, it’s not like it all comes in one round, it is usually called several times a year early on. GPs don’t want to call capital just to sit on it, and if opportunities dry up they can actually send it back to be recalled later. If you have more questions, ask away.