Flow of Capital in & out a Fund
This article should help clarify which funds flow into and out of the fund bank account and the management entity bank account.
Fund Bank Account
Incoming money flows
- Investor capital
- Manager capital
- Operating income from investments
- Principal returned from investments
- Interest, dividends or capital gains from investments
Outgoing money flows
- Investments made by the fund
- Loans originated by the fund
- Investor distributions out from the fund
- Loans originated by the fund
- Fund expenses
- Fund manager income (also a fund expense)
Management Entity Bank Account
Incoming money flows
- Equity capital from partners / co-managers
- Manager income from the Fund
- Expense reimbursements to Manager for fund expenses paid by management entity
Outgoing money flows
- Manager investments into Fund
- Management entity expenses
- Distributions back to partners / co-managers