Capital Call
Private Credit glossary · Fund Structures, Returns & Economics
Definition
Demand to LPs for previously committed capital to fund new investments or expenses.
Capital Call in plain English
When investors join a private fund, they don't hand over all their money at once — they promise a total amount and pay it in only when the fund actually needs it. A capital call is the fund manager saying, "Time to send in some of what you pledged," usually because a good deal just showed up or a bill is due. Think of it like a group of friends agreeing to buy a house together: nobody wires their full share on day one, so whoever's organizing texts everyone "send $5,000 now" each time a real payment comes up. This lets investors keep their cash earning money elsewhere until the exact moment it's needed.
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