Soft Commitment
Private Equity glossary · Private Equity Fundamentals
Definition
Non-binding indication of LP interest before final close, providing fund managers visibility into fundraising trajectory.
Soft Commitment in plain English
When a PE firm is raising a new fund, investors don't all sign final paperwork at once. A soft commitment is an investor saying "I'm planning to put in about $50 million" — a serious signal of interest, but not yet a legally binding promise. It's like friends replying "yeah, I'm in" to a party invite before anyone actually shows up: it helps the host gauge the crowd, even though someone can still bail. These non-binding signals let the fund manager see whether fundraising is on track before everything is locked in at the final close.
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