{"concept_id":"ALTSS-LIFE-003","slug":"capital-call","canonical_name":"Capital Call","aliases":["drawdown (capital)","capital call notice","draw down notice","contribution notice"],"kind":"process","authority":"industry","facets":["LIF"],"domains":["FUND-TERMS"],"display_title":"Capital Call","search_aliases":["what is a capital call","capital call private equity","capital call notice","drawdown notice meaning","how much notice for a capital call","capital call vs distribution"],"one_sentence_definition":"A capital call is the general partner's formal demand, issued under the limited partnership agreement, that limited partners pay a specified portion of their unfunded commitments to the fund by a stated date.","plain_english":"Private funds draw money from their investors when they need it. A capital call notice tells each LP how much to pay, what it is for and when it is due. LPs pay in proportion to their commitments unless the limited partnership agreement (LPA) says otherwise for a particular investment.","parent_concepts":["capital-commitment"],"child_concepts":[],"related_concepts":["unfunded-commitment","subscription-line","defaulting-lp","excuse-and-exclusion-rights","equalization","distributions","capital-account-statement","fund-administrator"],"comparison_concepts":[],"not_the_same_as":[{"slug":"distributions","distinction":"A call moves cash from LPs into the fund; a distribution moves cash or assets from the fund back to LPs."},{"slug":"subscription-line","distinction":"A subscription line is fund-level borrowing that delays or replaces calls in the short term; it is repaid with later capital calls."}],"formula_ids":[],"worked_examples":[{"title":"Illustrative pro rata call, with one excused LP","paragraphs":["A fund has $400m of commitments. An LP with a $20m commitment (5%) receives a $30m call: $24m for a new investment and $6m for management fees and expenses. Its pro rata share is $1.5m. If another LP with a $10m commitment is excused from that investment, the $24m investment portion is spread over the remaining $390m of commitments, so this LP pays about $1.23m for the investment plus $0.30m for fees and expenses, roughly **$1.53m** in total."]}],"sections":[{"heading":"How a call works","paragraphs":["The GP determines the amount needed, allocates it among LPs, usually pro rata to commitments or to unfunded commitments, and sends each LP a notice. The LPA sets the minimum notice period. It is a contractual term, not a legal requirement. The Institutional Limited Partners Association (ILPA) Model LPA requires each drawdown notice to be delivered at least ten business days before the due date, and ILPA's Principles 3.0 recommend a window of at least ten business days for LPs to respond to capital call requests. LPs wire funds to the fund's account by the due date. The fund administrator records the contribution in each LP's capital account."]},{"heading":"What a capital call notice contains","paragraphs":["A notice normally states: the total amount called and the LP's share; the purpose split between investments, [management fee](/glossary/management-fee), organisational and fund expenses; the portfolio company or transaction if the call funds an investment; the due date and wire instructions; and the LP's cumulative contributions and remaining [unfunded commitment](/glossary/unfunded-commitment) after the call. ILPA published a Capital Call & Distribution Notice Template in 2011, and Principles 3.0 ask that calls carry information consistent with ILPA's standardised reporting, including each LP's percentage and the calculation of management fees and any offsets. Classifying each call by purpose matters for reporting: the ILPA Performance Template's granular methodology relies on calls being classified at transaction level to separate investment flows from fee and expense flows, and the [ILPA reporting template](/glossary/ilpa-reporting-template) reports fees and expenses separately."]},{"heading":"Subscription lines and call timing","paragraphs":["Many funds first draw on a [subscription line](/glossary/subscription-line) and then call LPs later in a single, larger call, sometimes months after the investment closes. This reduces the number of calls and smooths LP cash management but shortens the time LP capital is at work, which usually raises [IRR](/glossary/irr). ILPA recommends that managers disclose facility use and show performance with and without the facility."]},{"heading":"Exceptions to pro rata","paragraphs":["LPs with [excuse or exclusion rights](/glossary/excuse-and-exclusion-rights) do not fund investments they are excused from, so other LPs' shares rise. Later closers pay an [equalization](/glossary/equalization) amount at their admission rather than ordinary calls for earlier investments. Some LPAs call fees from specific LPs at different rates (fee classes), so the fee portion is not always pro rata."]},{"heading":"Failure to pay","paragraphs":["An LP that misses a call becomes a [defaulting LP](/glossary/defaulting-lp) after any cure period. The fund may cover the shortfall by calling the other LPs (usually capped as a percentage of their commitments) or by drawing on the subscription line, and the LPA remedies against the defaulter apply."]},{"heading":"Operational risk: payment fraud","paragraphs":["Capital call notices are a known target for payment-redirection fraud, because they carry wire instructions and large amounts. Standard LP controls include confirming any change in bank details through a known contact by phone and comparing notices against the administrator's investor portal."]}],"classification_rules":[],"calculation_rules":[],"common_mistakes":["Assuming notice periods are set by law. They are contractual and vary by LPA.","Booking the whole call as invested capital. Part of a call usually pays fees and expenses.","Comparing IRRs of funds that use subscription lines with those that call capital at once, without adjustment."],"edge_cases":["Calls after the investment period are restricted to the purposes the LPA lists; a call for a new platform investment would breach most LPAs.","If a deal fails to close after capital is called, the LPA usually requires the funds to be returned or treated as recallable within a set period.","Calls in a multi-currency fund may be issued in the LP's class currency, introducing foreign exchange translation."],"external_standard_mappings":[],"source_ids":["SRC-ILPA-MODEL-LPA","SRC-ILPA-PERFORMANCE-TEMPLATE-2025","SRC-ILPA-PRINCIPLES-3","SRC-ILPA-REPORTING-TEMPLATE-2025","SRC-ILPA-SUBLINES-2020"],"citations":[{"source_id":"SRC-ILPA-SUBLINES-2020","pinpoint":"pp. 2-3","supports":"Net performance shown with and without the use of subscription lines; disclosure of facility use","source":{"source_id":"SRC-ILPA-SUBLINES-2020","title":"Enhancing Transparency Around Subscription Lines of Credit","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"guidance","url":"https://ilpa.org/resources-tools/resource-library/enhancing-transparency-around-subscription-lines-of-credit/","year":2020,"publication_date":"June 2020 (follows the June 2017 guidance Subscription Lines of Credit and Alignment of Interests)","jurisdiction":"intl","status":"Current","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-PERFORMANCE-TEMPLATE-2025","pinpoint":"Granular methodology","supports":"Capital calls classified at transaction level to separate investment from fee and expense calls","source":{"source_id":"SRC-ILPA-PERFORMANCE-TEMPLATE-2025","title":"ILPA Performance Template (Granular Methodology and Gross Up Methodology), v1.1","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/ilpa-templates-hub/ilpa-performance-template/","year":2025,"publication_date":"Released January 2025 (QRSI); v1.1 April 2025","jurisdiction":"intl","status":"Current; for funds commencing operations on or after 1 January 2026","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-MODEL-LPA","pinpoint":"WOF Secs. 6.2.1 (Drawdown Notice), 6.6 (Defaulting Partners, incl. 6.6.6)","supports":"Drawdown notices at least ten business days before the due date, consistent with the ILPA notice template; default remedies; additional drawdowns from non-defaulting partners capped by reference to their commitments","source":{"source_id":"SRC-ILPA-MODEL-LPA","title":"ILPA Model Limited Partnership Agreement (Whole of Fund and Deal-by-Deal versions)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/model-limited-partnership-agreement/","year":2020,"publication_date":"Whole of Fund first released October 2019, updated July 2020; Deal-by-Deal version and term sheet released 22 July 2020","jurisdiction":"intl","status":"Current","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-PRINCIPLES-3","pinpoint":"pp. 7, 35","supports":"Capital Call & Distribution Notice Template (2011); at least 10 business days for LPs to respond to capital call requests; call information consistent with ILPA standardised reporting, including LP percentages and management fee calculations with offsets; performance with and without subscription facilities","source":{"source_id":"SRC-ILPA-PRINCIPLES-3","title":"ILPA Principles 3.0: Fostering Transparency, Governance and Alignment of Interests for General and Limited Partners","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"guidance","url":"https://ilpa.org/wp-content/uploads/2019/06/ILPA-Principles-3.0_2019.pdf","year":2019,"publication_date":"Third edition, released 27 June 2019","jurisdiction":"intl","status":"Current edition (no 4.0 found as of 2026-10-01)","last_verified":"2026-10-01"}},{"source_id":"SRC-ILPA-REPORTING-TEMPLATE-2025","pinpoint":"Suggested Guidance pp. 9-10","supports":"The v2.0 template reports fees, expenses and offsets as defined categories in the capital account statement and a schedule of fees and reimbursements","source":{"source_id":"SRC-ILPA-REPORTING-TEMPLATE-2025","title":"ILPA Reporting Template (v. 2.0)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/resources-tools/resource-library/ilpa-reporting-template-v-2-0/","year":2025,"publication_date":"v2.0 released 21 January 2025 under the Quarterly Reporting Standards Initiative (QRSI)","jurisdiction":"intl","status":"Current; ILPA recommends implementation from Q1 2026","last_verified":"2026-10-01"}}],"faq":[{"q":"How often do private equity funds call capital?","a":"There is no fixed schedule. Calls follow deal timing and fee dates, and funds using subscription lines often batch several investments into fewer, larger calls."},{"q":"Can a GP call capital after the investment period?","a":"Yes, but usually only for follow-on investments, deals already committed, fees, expenses and liabilities, as the LPA specifies."}],"seo":{},"first_published":"2026-01-06","last_reviewed":"2026-10-01","last_modified":"2026-10-01","content_version":"2.0.0","url":"https://altss.com/glossary/capital-call","json_url":"https://altss.com/reference/concepts/capital-call.json","title":"Capital Call","formulas":[],"sources":[{"source_id":"SRC-ILPA-MODEL-LPA","title":"ILPA Model Limited Partnership Agreement (Whole of Fund and Deal-by-Deal versions)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/model-limited-partnership-agreement/","year":2020,"publication_date":"Whole of Fund first released October 2019, updated July 2020; Deal-by-Deal version and term sheet released 22 July 2020","jurisdiction":"intl","status":"Current","last_verified":"2026-10-01"},{"source_id":"SRC-ILPA-PERFORMANCE-TEMPLATE-2025","title":"ILPA Performance Template (Granular Methodology and Gross Up Methodology), v1.1","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/industry-guidance/templates-standards-model-documents/ilpa-templates-hub/ilpa-performance-template/","year":2025,"publication_date":"Released January 2025 (QRSI); v1.1 April 2025","jurisdiction":"intl","status":"Current; for funds commencing operations on or after 1 January 2026","last_verified":"2026-10-01"},{"source_id":"SRC-ILPA-PRINCIPLES-3","title":"ILPA Principles 3.0: Fostering Transparency, Governance and Alignment of Interests for General and Limited Partners","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"guidance","url":"https://ilpa.org/wp-content/uploads/2019/06/ILPA-Principles-3.0_2019.pdf","year":2019,"publication_date":"Third edition, released 27 June 2019","jurisdiction":"intl","status":"Current edition (no 4.0 found as of 2026-10-01)","last_verified":"2026-10-01"},{"source_id":"SRC-ILPA-REPORTING-TEMPLATE-2025","title":"ILPA Reporting Template (v. 2.0)","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"template","url":"https://ilpa.org/resources-tools/resource-library/ilpa-reporting-template-v-2-0/","year":2025,"publication_date":"v2.0 released 21 January 2025 under the Quarterly Reporting Standards Initiative (QRSI)","jurisdiction":"intl","status":"Current; ILPA recommends implementation from Q1 2026","last_verified":"2026-10-01"},{"source_id":"SRC-ILPA-SUBLINES-2020","title":"Enhancing Transparency Around Subscription Lines of Credit","authors":"Institutional Limited Partners Association","publisher":"ILPA","document_type":"guidance","url":"https://ilpa.org/resources-tools/resource-library/enhancing-transparency-around-subscription-lines-of-credit/","year":2020,"publication_date":"June 2020 (follows the June 2017 guidance Subscription Lines of Credit and Alignment of Interests)","jurisdiction":"intl","status":"Current","last_verified":"2026-10-01"}]}