Distributions from a Rolling Fund are generally allocated to LPs based on their total capital contributions, including any rollover contributions from previous quarters and any notional increases from waived fees – minus carry. This means LPs with more invested capital, whether from new contributions or waivers, receive a proportionally larger share of any fund proceeds.
For example, if two LPs each contribute $100,000 to a fund, but one rolls over an additional $50,000, distributions would be allocated 60/40 in favor of the LP with the larger total contribution. Carry is applied individually to each LP’s share of the proceeds.
An LP’s ownership percentage may change from quarter to quarter based on fluctuations in their subscription amount and the commitments of other LPs. If new LPs subscribe and an existing LP keeps their contribution flat, their ownership percentage in the fund will decline. Ownership is recalculated for each quarterly fund and reflects the relative capital committed in that specific period.
Note: These mechanics can vary based on fund structure. For full details, refer to the Limited Partnership Agreement (LPA) for your specific Rolling Fund.