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A capital call line is a revolving line of credit that a lender provides to a private equity group (PEG). The line of credit is collateralized with a pledge of the right to call and receive capital contributions from the fund's investors.
A capital call (also known as a draw down or a capital commitment) is a legal right of an investment firm or an insurance firm to demand a portion of the money promised to it by an investor. A capital call fund would be the money that had been committed to the fund.
We are writing to notify you that in ance with Section 3.3 of the Agreement, the Company hereby requests a Capital Contribution in the amount of $________. Based on your Ownership Percentage of ___%, the total amount owed by you is $________. less than fifteen (15) days' notice.]
Capital Call Example Say you commit $100k to a $100M fund. The LPA states that the initial drawdown is 30%?that is, you must contribute $30k to the fund now and hold onto your remaining $70k until it's called.
A capital call, also known as a "draw down," is the act of collecting funds from limited partners whenever the need arises. When an investor buys into a private equity fund, the firm makes an agreement with the investor that these funds will be available when the firm requests them.