Capital account statement

The roll-forward

Opening balance + contributions − distributions − fees ± allocated gains and losses = closing balance

Every capital account statement is this identity, whatever the layout. If the lines do not tie back to the closing balance, something has been netted, reclassified or left off — and that is worth finding before the number reaches a report.

A worked example

An LP opens the quarter at €2,400,000. The manager calls €300,000, distributes €150,000, charges €18,000 of management fee, and allocates €212,000 of unrealised gain. The closing balance is 2,400,000 + 300,000 − 150,000 − 18,000 + 212,000 = €2,744,000. That closing balance is the LP's NAV for the quarter, and it is the figure every downstream multiple is calculated from.

What it is not

Capital account statement vs capital call notice

A call notice is a request for money on a specific date, issued whenever the manager needs it. A capital account statement is a periodic summary of the position as a whole. The call notice tells you what to pay; the capital account statement tells you where you stand once you have paid it.

Capital account statement vs Schedule K-1

The K-1 is a US tax document reporting your allocated share of income, deductions and credits for a tax year. It has its own capital account section, on a tax basis, which is why its figures routinely disagree with the quarterly statement's fair-value basis. Both are correct on their own terms; reconciling them is a known annual chore, not an error.

Capital account statement vs the quarterly report

The quarterly report is written for every investor in the fund: portfolio commentary, valuations, fund-level performance. The capital account statement is written for one. If a figure is specific to your commitment, it comes from the capital account statement.

Is there a standard format?

ILPA publishes a reporting template that standardises the capital account lines, and adoption has grown, but it is voluntary. In practice every manager's PDF has its own layout, labelling and level of netting, which is why extracting these reliably is a document problem before it is a finance problem.

Worth knowing

• It arrives quarterly, typically 45 to 90 days after the period end.
• The closing balance is the LP's NAV, and the denominator-free input to TVPI, DPI and RVPI.
• Fees may be shown gross, net or embedded in the gain allocation, and the choice changes reported performance.
• The as-of date matters more than the delivery date: cashflows after the period end are not in it.