You missed a capital call. What actually happens next
The LPA usually gives you a cure period and charges interest. Default provisions exist but are rarely the first move. Here is the sequence, and the four failure modes that cause most misses.
A drawdown notice arrived ten days ago at an address nobody checks, and the wire deadline was yesterday. Before anything else: this is common, it is usually recoverable, and the sequence that follows is written down in a document you already have.
Read your LPA. Everything below is the general shape; your partnership agreement is the authority, and the terms vary more than people expect.
The usual sequence
Interest accrues from the due date. Most partnership agreements charge interest on late contributions from the original due date, commonly at a rate set well above base. Figures in the region of base plus several points are typical, and some agreements use a flat percentage. It is priced to be annoying rather than punitive.
There is normally a cure period. LPAs typically give a defaulting partner a window (often somewhere between ten and thirty days after notice), to make good the contribution plus interest before default provisions can be triggered. This is the part people do not know, and it is the reason a missed deadline is usually a phone call rather than a crisis.
Default provisions exist, and are the last resort. Where a partner does not cure, agreements can provide for forfeiture of some portion of the capital account, forced sale of the interest, loss of voting rights, or exclusion from future investments. These are real and they are severe. They are also almost never the general partner's first move against an investor they want to keep for the next fund.
Call the administrator today, not tomorrow. Before the cure period runs. A late wire that arrives with a phone call attached is an administrative matter. A late wire that arrives in silence, after a second notice, starts to look like something else.
Why it happened
Nearly every missed call we have seen traces to one of four things.
The notice went to one person. Administrators send to the contact on file. If that person is on holiday, has changed roles, or simply had a heavy week, there is no second path. This is by far the most common cause and the easiest to fix: the deadline needs to be visible to a team, not delivered to an individual.
It arrived in a format nobody processes. A PDF attached to a mail with an unremarkable subject line, in an inbox that also receives quarterly reports, tax documents and newsletters from the same sender. Nothing distinguishes the message with a ten-day deadline from the one with none.
The cash was not there. Distinct from the first two and more serious, because it means the unfunded commitment number was wrong or nobody was looking at it. If your liquidity planning runs off a figure someone recalculates by hand from a folder of statements, it is stale by construction, and calls cluster, particularly in a quarter when several funds in the same vintage draw at once.
The recallable distribution was forgotten. A distribution came back, was marked recallable in the notice, and was treated as final in the spreadsheet. Unfunded commitment was then understated by exactly that amount, and the fund called it.
What prevents the next one
The structural fix is not a better reminder. It is that the obligation stops living in a mailbox.
Three things do most of the work. A call is a record against the commitment it draws on, so unfunded is derived from the records rather than retyped on top of them. The due date is visible to everyone with access to the entity, so no single absence breaks the chain. And notices are processed on arrival rather than when someone gets to them. Forwarded to an address that turns them into records, or picked up from the mailbox automatically.
Add to that a genuine rolling view of unfunded commitment across every entity, with recallable distributions added back where the LPA says they should be. Most liquidity surprises in private markets are not surprises about the market. They are surprises about a number that was never being maintained.
If you want the mechanics, we wrote about tracking capital calls against their commitments in more detail. But the LPA comes first. Go and read the default provisions before you do anything else. They are shorter than you think.