Committed Capital

When a family signs a limited partnership agreement to invest in a private fund, they are making a binding commitment to contribute a specified amount of capital over the fund's investment period. That amount — committed capital — sits as a legal obligation, not yet invested cash. The fund manager draws it down progressively through capital calls as investments are made. The portion not yet drawn is sometimes called "dry powder" or "uncalled capital."

Understanding the difference between committed capital and invested capital matters enormously for planning. A family with illustrative committed capital of $10 million across several funds has not deployed $10 million — they may have deployed only a fraction so far, with the rest still owed on future calls. This gap has real implications for how a family manages its liquid reserves. The liquidity management function of a family office typically tracks this unfunded obligation carefully alongside near-term operating expenses and other cash needs.

Consider a two-generation family with ownership in three private funds. Each fund has a different vintage year — the year the fund began investing — and a different pace of capital calls. The family's chief financial officer maintains a rolling schedule of expected draws to ensure cash is accessible when calls arrive without leaving excessive money idle. This kind of tracking is a standard operational task, particularly as families grow their exposure to private equity and private credit.

A common confusion is conflating committed capital with the net asset value of a fund position — those are different figures. Committed capital is what was pledged; net asset value reflects what the underlying portfolio is worth at a given moment. Families and their advisors monitor both, for different reasons, as part of regular investment management reporting.