PE Q because, account, question, unless, included

laurab

quick question on PE: because the unfunded commitments are not calculated in the NAV, where are they located? i.e. on the PE firms BS or in trust/escrow account? i dont see why the "cash" wont be included, unless its just 'rights to cash'?

WarrenB1

PE performance calculation is based on the ability of the manager to create value from companies they acquire. Having the cash on hand should not be calculated along with NAV as it has not been invested in a company yet. It is merely a commitment, and the money is not yet in the hands of the PE manager, and should therefore not be included in the calculation.

maryli

And since it's just a commitment the investor needs to be ready to deliver the monies when called. It's rights to cash. Therefore the monies are most likely located in some investment account of the investor in rather liquid assets - think Treasuries, bunds, etc.

ayodayo

It is just a commitment to invest, not an actual investment.