Capital Commitment
A capital commitment is the maximum amount an investor agrees to contribute to a private fund under its governing documents.
Private-market terms for capital commitments, net IRR, DPI, distribution waterfalls, and carried economics.
Private-Market Capital Commitments and Performance terms explain investments in non-public companies, private funds, early-stage financing, sponsor-led deals, capital commitments, exits, and private-market access rules.
Use this branch when investor eligibility, capital calls, lockups, valuation method, sponsor economics, exit path, or private-transaction structure changes the investment decision.
| Term | Use it for |
|---|---|
| Capital Commitment | Contractual funding limits, paid-in capital, unfunded exposure, recallable distributions, and liquidity planning. |
| Carried Interest | Performance-linked participation in private-fund profits after the applicable capital-return and waterfall conditions. |
| Net Internal Rate of Return | Annualized LP-level performance after the stated fees, expenses, carried interest, and cash-flow timing effects. |
| Profits Interest | Partnership incentive rights in future profits or appreciation above a stated liquidation threshold. |
| Distributed to Paid-In Capital (DPI) | Cumulative fund distributions relative to the capital investors have contributed. |
| Distribution Waterfall | How private-fund proceeds move through capital-return, preferred-return, catch-up, carry, and reconciliation tiers. |
Check the offering documents, investor eligibility, capital commitment, lockup, liquidity limits, fees, carried interest, valuation method, tax treatment, governance rights, and expected exit path.
Private investments can be illiquid, restricted, and complex; this page is educational and is not investment, legal, or tax advice.
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A capital commitment is the maximum amount an investor agrees to contribute to a private fund under its governing documents.
Carried interest is a contractual share of private-fund profits allocated to a manager after the applicable capital-return and waterfall conditions are met.
Distributed to paid-in capital measures cumulative private-fund distributions relative to the capital investors have contributed.
A distribution waterfall sets the order for returning capital, paying a preferred return, and allocating carried interest in a private fund.
Net internal rate of return measures an investor's annualized private-fund return after specified fees, expenses, and carried interest.
A profits interest is a partnership interest designed to share in future profits or appreciation without receiving existing liquidation value at grant.