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No, that's not how it is. If the LP doesn't pay their capital call they go into default and the returns on all the money they've invested so far can be taken aw
by spoonjim 4y ago
No, that's not how it is. If the LP doesn't pay their capital call they go into default and the returns on all the money they've invested so far can be taken away. The only LPs who default on the capital call are individual investors who are flat out broke. They will of course default on their capital call before their mortgage.
- grey-area 4y agoWhat if there are no returns on all the money they have invested so far? This is quite possible in a bubble followed by a downturn.
- jacquesm 4y agoThen you refer to your contract where on page 1 it states fairly clearly that there are no guarantees of returns and that the management fee is on the amount 'under management', and that a capital call will be inbound. Obviously all of these scenarios tend to be covered by the contracts and if you can't read a contract of that level of complexity then you should not be playing this game.