Private Fund Terms
The clauses in a limited partnership agreement or an access-fund PPM that decide who is paid, when, and on what base, each defined with the arithmetic. Written for the reader who has a $250,000 ticket into a fund whose direct minimum is $10 million and two documents to get through.
Fund Economics
How profit is split between investors and the manager, tier by tier.
Distribution Waterfall
The four tiers in order, European (whole-fund) versus American (deal-by-deal), and a $100 million worked example.
Preferred Return (Hurdle Rate)
The 8 percent standard, compounded versus simple, hard versus soft hurdles, and why it is not a guaranteed yield.
GP Catch-Up
How the catch-up tier turns the hurdle into a timing device, and what 100, 80 and 50 percent catch-ups leave investors.
Carried Interest
The 20 percent, how it is calculated and vested, how it is taxed, and what it means inside an access fund.
Clawback Provision
Returning overpaid carry: the trigger, the after-tax trap, and the guarantee, escrow and interim tests that make it collectible.
Management Fee, Offsets and Step-Downs
Committed versus invested capital, the step-down, 100 percent fee offsets, the fee waiver, and the access-fund layer on top.
Measuring Returns
The multiples and rates a fund reports, and what each one leaves out.
DPI, TVPI and RVPI
The three multiples, the formulas, and why DPI is the only one that is cash.
MOIC vs IRR
How much versus how fast, a conversion table, and the three ways IRR rises without the multiple.
J-Curve
Why early returns are negative, how long it lasts, and what subscription lines, secondaries and evergreen funds do to it.
Subscription Lines
Fund-level borrowing that delays capital calls, lifts IRR and shortens the J-curve.
Capital Call
How committed capital is drawn, notice periods, and what happens when an investor defaults.
Public Market Equivalent (PME)
Did the fund beat an index with the same money on the same dates: Kaplan-Schoar, direct alpha, and the worked example.
Commitments and Cash Flow
What a commitment obliges you to, what the manager puts in, and what the fund does with money it earns back.
Capital Call Default
The cure period, default interest, forfeiture of up to half the account, and how a missed call in a feeder ripples up to the master fund.
GP Commitment
The 1 to 5 percent the manager invests alongside you, and why the source of the money (cash, fee waiver or a lender) is the whole question.
Recycling Provision
Reinvesting early proceeds instead of distributing them: the 100 to 120 percent cap, fee recycling, and what it does to DPI.
Evergreen vs Drawdown Funds
Commitments and calls versus cash at NAV and quarterly windows: fee base, J-curve, gates and why their returns cannot be compared.
Co-Investment Rights
Investing alongside the fund with no fee and no carry: who gets allocated, the adverse selection problem, and what platforms sell as co-invest.
In-Kind Distributions
Shares instead of cash after an IPO: how they are valued for carry and DPI, the tax deferral, and what a feeder investor receives instead.
NAV Facility
Borrowing against the portfolio at 10 to 25 percent LTV: follow-ons, bridging exits, the distribution controversy and the 2024 ILPA guidance.
Governance
The terms that tie a ten-year commitment to specific people and specific promises.
Key Person Clause
Who is named, what triggers a suspension, the cure period, and why an access-fund investor cannot vote on it.
Side Letters and MFN Clauses
What large investors negotiate, how most-favored-nation elections work, and where platform investors stand.
Fiduciary Duty Waiver
The Delaware clause that lets a manager narrow the duties it owes investors.
Manager Discretion Limits
What a manager may do without asking, and where the advisory committee's consent is required.
LP Advisory Committee (LPAC)
The three to nine investors who approve conflicts, valuations, extensions and continuation funds for everyone, and owe the others no duty.
Excuse Rights
Sitting out one investment on legal, regulatory or disclosed-policy grounds without defaulting; the GP's mirror-image exclusion right.
Fund Term Extension
How ten years becomes thirteen: one-year extensions, who consents, the fee step-down, zombie funds and the continuation-fund alternative.
GP Removal
For-cause versus no-fault removal, the 75 to 85 percent vote, what the removed manager keeps, and why it almost never happens.
Access and Structure
The vehicles through which individuals reach institutional funds, and the filings that show what they sold.
Access Fund
The platform and bank feeder vehicle, its second fee layer, and AltStreet's read of 1,587 access-fund Form D filings.
Fund of Funds
The double fee layer in a worked example, what diversification and access it buys, and how the single-fund access vehicle descends from it.
Feeder Fund
Master-feeder structures, why onshore and offshore feeders exist, and how they report.
3(c)(7) Fund
The qualified-purchaser exemption most access funds rely on.
3(c)(1) Fund
The 100-holder exemption for smaller vehicles.
Form D Private Placement
The filing every access fund makes, and the only public running total of what it sold.
GP-Led Secondary
Continuation vehicles and the choice investors face at the end of a fund's life.
LP Stake Secondary
Selling a fund interest before the fund ends, and the discount to NAV that clears.
The access-fund vehicles behind these terms are in the ledger as EDGAR entities: 1,587 offering chains named access fund and 4,239 named feeder as of September 10, 2026, each with its Form D sales history on its entity page and in the terminal screener. The platform side is in the iCapital review.