Liquidity Planning for Capital Commitments

Overview:
Alternative funds call capital as deals arise. Understanding drawdowns keeps investors liquid and compliant.

Key Points:

• Global average capital-call notice ≈ 10 days; Indian funds typically 7 days.
• Default interest on missed calls ranges 15–18 percent per year.
• Investors should hold 10–15 percent of committed capital in liquid assets (T-Bills or overnight funds).
• Example: ₹ 1 crore commitment → quarterly call ₹ 25 lakh → keep ₹ 10 lakh buffer.
• Institutional Limited Partners globally maintain cash coverage ratio 1.3 × future calls; India averages 1.1 × and rising.
• By 2030 SEBI plans to introduce automated capital-call alert systems via digital registries.

Truvest Capital Insight:
Liquidity is the oxygen of commitment capital — plan buffers before you promise.

Disclaimer: Educational content only. Not investment advice.