Particularities of investing in private capital funds: commitment, capital calls and distributions

Private capital investment has a series of characteristics that make it different to traditional investments and that investors must be aware of and understand before investing in a private capital fund.

Throughout the investment process, the participant will encounter different periods, such as the commitment, capital calls or distributions, depending on the private capital fund's life cycle.

Unlike traditional investment funds, this life cycle is finite; it usually lasts 10 years and is divided into three stages: setting the fund and fundraising, investing and divesting, during which the participant contributes capital and receives gains.

These stages are not clear-cut; the investment and divestment can occur at the same time, depending on the funds' needs and the opportunities found by the management companies.

Throughout this guide prepared by Crescenta, investors can find out in detail how these funds operate, the actors involved and the different stages of their life cycle.

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This content is purely informative. This content is merely financial training offered to you by Crescenta, without the intention of giving any type of personalised investment recommendation.

It is neither any type of advertising of financial instruments nor a recommendation or purchase offer.