Let’s hear it boys and girls. What is vintage year?
the year in which capital is first drawn/asked for PE … ??
That was in GIPS for PE investments. The year the fund was formed I believe. But you should review the discloser requirements related to this topic.
Year that is considered exceptionally good for champagnes.
bdeora is right
what is meant by “first drawn/asked”? is this the first contributions made from the committed capital?
the year in which the capital is first drawn from the available committment or when the capital is actually invested by the PE firm in some company
CFAI definition: Year the private equity fund closed.
closed means closed for new investments right? so existing cash is fully invested? is it ?
Yes bdeora. And the GIPS provision: Composite construction requires all closed end PE investments to be included in a composite defined by strategy and vintage year. By the way, in GIPS vintage year is also defined as the year in which capital is first drawn down or called from investors so for the exam I would assume it closes for investments when the capital is first drawn down, which makes sense since you can’t have drawdown at different times for different investors because it would make a messy calc of who gets which return from the fund.
So kind of a new offering of fund where they call for committment first and once they get sufficient interest , they close it for new investor and calls for cash which was committed from those who applied… which complies with GIPS closed ended definition
Yeah, just one thing, I am pretty sure that the first drawdown closes the fund, but that first drawdown may not be for all the cash at once, they call for the cash as needed once closed.
yes, see page 39 of volume 5. “…investors often make comparisons with funds closed in the same year (the funds’ vintage year).”
do these funds also have claw back provision? where capital might be called back by the investor if sufficient return is not earned just like hedge funds ?
Management fee is usually 1.5-2.5% of committed funds, not funds already invested. Incentive fee is called carried interest. Manager’s share of profits is above hurdle rate. Can be paid on expectations but usually a claw back provision of expectations not met.