Glossary
Drawdown
Drawdown refers to the actual transfer of committed capital by the General Partner of a Private Markets fund. Investors are notified via a Capital Call Notice and asked to transfer a portion of their Commitment within a set deadline, once investment opportunities have been identified.
At a glance
- Drawdowns occur irregularly, depending on the pace at which the fund manager deploys capital.
- Investors must maintain sufficient liquid funds at all times to meet Drawdowns promptly.
Frequently asked questions
Since the timing and size of Drawdowns cannot be determined in advance, it is advisable to maintain a liquidity reserve outside the Private Markets portfolio. Over-commitment of capital is common practice but carries the risk that concurrent calls may place liquidity under pressure.
Part of the topic
Private Markets
This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.