Year-by-Year Cash Flows
Projected capital calls, distributions, and portfolio metrics by calendar year
| Year | New Commitments | Capital Called | Distributions | Net Cash Flow | Unfunded | NAV |
|---|
How Commitment Pacing Works
Commitment pacing is the process of scheduling new fund commitments so that an LP's actual exposure to alternatives stays within its target allocation over time. Because private fund capital is called gradually and returned over several years, LPs must commit more than their target allocation to maintain desired exposure. This is called overcommitment.
The need for overcommitment is driven by the J-curve: in a fund's early years, capital calls exceed distributions, and NAV may even dip below cost due to fees and unrealized losses. As the portfolio matures, distributions accelerate and NAV grows. Steady-state exposure depends on the pace at which capital is drawn, the fund's return profile, and the timing of distributions.
Drawdown Pace by Strategy
Different fund strategies deploy capital at different rates:
- Front-loaded (PE/Buyout): Most capital is called in years 1 through 3 as the GP acquires portfolio companies. Drawdown tapers off as the fund enters its harvest period.
- Even (Credit/Real Estate): Capital is deployed more steadily across the investment period, reflecting ongoing deal flow or construction timelines.
- Back-loaded (VC): Initial commitments are smaller as the GP makes seed-stage bets. Follow-on rounds in later years pull more capital as winners emerge.
Limitations
- Simplified model: This calculator uses a deterministic drawdown and distribution schedule. Real fund cash flows are lumpy and unpredictable.
- No recycling: Many funds recycle early proceeds back into new investments, which changes the effective drawdown profile. This model does not account for recycling.
- Constant commitments: Annual commitment amounts are held constant. In practice, LPs adjust commitment pacing based on denominator effects, liquidity needs, and market conditions.
- NAV approximation: NAV is computed as cumulative capital called minus cumulative distributions. This is a simplified proxy and does not reflect unrealized gains or losses on the underlying portfolio.
This calculator is for planning and educational purposes only. Actual fund cash flows will vary materially from these projections. Consult your investment team or advisor before making allocation decisions.
