Fund Cash Flow (Capital Calls/Distributions)

This guide explains how to model capital calls, distributions and fund level cashflows for funds, VC, PE and family offices in Model Reef.

You will:

• Represent a fund and its LP commitments in the model structure.

• Model capital calls, management fees and fund expenses over time.

• Link portfolio company cashflows to fund level inflows and outflows.

• Compute fund level IRR, money multiple and cashflow metrics.

Model Reef is not a fund administrator or general ledger. It models forward looking and scenario based fund cashflows and economics.

When to use this pattern

Use this pattern when:

• You manage closed end or evergreen funds with LP commitments.

• You need visibility on fund cashflows, headroom and distributions.

• IC and LP reporting depend on forward views of calls and returns.

• You want scenario level fund economics tied to portfolio forecasts.

It combines with:

• Portfolio Company Forecasting

• IRR MOIC and Waterfall Models

• LP Reporting Dashboard

• Build a Capital Structure Model

Architecture overview

1

Fund structure

• A fund level model or branch.

• LP commitments, GP commitment and carry arrangements.

• Links to portfolio company models or imported series.

2

Cashflow categories

• Capital calls and contributions.

• Management fees and fund operating expenses.

• Investment outflows to portfolio companies.

• Distributions, realisations and exits.

• GP carry where you choose to model it.

3

Outputs

• Net cash position and undrawn commitments.

• Fund level IRR and money multiple.

• Distribution patterns and timing.

Step 1: Define fund structure, commitments and horizon

Create a model for each fund with branches such as:

• Fund - Fund I

  • LP Capital and Commitments

  • GP Commitment

  • Investments

  • Fees and Fund Expenses

  • Distributions and Carry

Set up drivers for:

• Total LP commitment.

• GP commitment.

• Fund term and investment period.

• Target commitment schedule if you have one (for example percentage called per year).

These will underpin call and contribution patterns.

Step 2: Plan capital call patterns

Use variables and drivers to forecast capital calls, including:

• Commitment drawdown schedule by period.

• Front loaded, even or back loaded call structures.

• Capital call notices and timing delays if you want payment timing accuracy.

Represent capital calls as Equity variables in the fund model so that:

• Capital called increases equity and cash.

• Undrawn commitment is reduced.

If you model contributions per LP class, treat them as separate variables using the same patterns with different sizes.

Step 3: Model management fees and fund expenses

Create Opex variables for:

• Management fees (for example percentage of commitments, invested capital or NAV).

• Fund operating expenses (legal, audit, custodians, consultants).

• GP overhead recoveries where applicable.

Attach drivers for:

• Fee base (commitment or NAV) and fee percentage.

• Timing of transition from commitment based to invested capital based fee.

• Seasonality or specific timing of non fee expenses.

These variables will:

• Hit P&L of the fund model.

• Reduce cash in the Cashflow Statement.

• Reduce net asset value where you choose to represent fund P&L explicitly.

Step 4: Link portfolio company cashflows and exits

For each portfolio company, either:

• Import equity cashflows (investment and distributions) from the company model into the fund model via the Data Library, or

• Enter simplified series representing expected investment outflows and exit inflows.

Create variables such as:

• Investments into Portfolio Companies.

• Realisation Proceeds per company or per asset.

• Dividends and interim distributions from portfolio companies.

Use these to construct a fund level cashflow profile that includes:

• Capital outflows for investments.

• Inflows from dividends, partial realisations and exits.

• Residual NAV for unrealised holdings.

Step 5: Compute fund level IRR and money multiple

Using the fund cashflow series:

• Capital calls as negative cashflows.

• Distributions to LPs and any return of capital as positive cashflows.

Use the valuation engine style logic conceptually to compute:

• Fund level IRR.

• Money multiple (distributions plus residual value divided by paid in capital).

• DPI (Distributions to Paid in) and RVPI (Residual Value to Paid in) if needed via formulas.

You can track:

• Gross fund performance excluding fees and carry.

• Net fund performance after fees and carry, using additional variables for GP economics.

Step 6: Use scenarios for pacing, exit and distribution strategies

Clone the base fund model into scenario models to explore:

• Different investment pacing and call patterns.

• Faster or slower exits and realisation profiles.

• Different exit valuations for portfolio companies.

• Changes to fund size, follow on reserves and recycling rules.

• Alternative distribution policies (for example early DPI versus later but larger distributions).

In each scenario, adjust:

• Commitment drawdown schedules.

• Portfolio company cashflows and exit timings.

• Fee and expense assumptions if strategy changes.

• Distribution and carry assumptions where modelled.

Compare scenarios using:

• Fund level IRR and money multiple.

• DPI, RVPI and total value to paid in (TVPI) where calculated.

• Cash and undrawn commitments over time.

• LP distribution profiles and GP carry outcomes.

Check your work

• Capital call patterns are feasible given portfolio construction plans.

• Fund cashflows are consistent with company level forecasts.

• IRR and multiple outputs make sense for base and stress scenarios.

• The model aligns with LP documentation where relevant.

Troubleshooting

Fund IRR looks unrealistic

Confirm the sign, timing and magnitude of cashflows and check that you are not double counting or omitting distributions or investments.

Undrawn commitments become negative

Check that cumulative calls do not exceed total commitments or adjust commitment size and pacing.

Difficult to keep fund and company models in sync

Use a clear process for exporting key outputs from company models and importing them into the fund model on a consistent schedule.

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• Variable Overview

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