life of a PE fund fundraising this refers to the period which appear firm raises money from investors in the form of capital commitments for a particular fund.

Capital commitments become a legal obligation for investors and will be quote unquote called by the Pea firm only when Investments are being made and Equity capital is needed.

There will be a series of closings soft and eventually a hard close after certain Target amounts for the overall size of the fund are met.

Soft closings are when the fund commitment levels are large enough for the PE fund to begin investing despite continuing to raise capital for some more time until a more desirable Fun Size is reached.

At that point the fun will have a hard closing and no more Capital will be allowed to be committed from new investors.

Fundraising will last between 12 and 18 months and will often involve every professional at a fund from a senior most Partners to Juniors most funds will use a third party advisor called a placement agent to help them raise Capital, especially if it's their first fund.

Placement agents are well acquainted with the investor Universe can make introductions to new investors. I can also assist a fund with its marketing documentation and fundraising tactics.

Larger funds will have dedicated internal investor relations teams to coordinate fundraisings and maintain ongoing communication with LPS during the life of a fund.

After the first one is raised subsequent fundraising take place. Once the capital in the previous fund is almost invested.

In this way PE firms have funds that overlap each other often referred to by the Vintage or the year the hard closing takes place or the number that a particular fund has such as font number four or five.

The investment period is the time frame during which the PE fund has agreed to deploy or invest capital.

This period is defined in the legal documents of the fund and typically is about 45 years. This can usually be extended by a year or more with the approval of the LPS.

Once this period is over the front cannot invest in any further new businesses.

However, exceptions are made for further investment for already acquired businesses such as add-on Acquisitions for portfolio companies.

Add-on Acquisitions are not considered new Investments, but rather use of capital to help an existing investment with inorganic or m&a growth. Therefore funds can continue to draw down on any remaining LP commitment in order to acquire and add on business through the life of the fund.

During this period the committed capital from LPS will be called upon to make investments as and when the funds are needed to acquire portfolio companies.

This is referred to as a capital call committed capital is therefore never fully contributed on day one and often not all of invested committed capital is called during the investment period any amount of uninvested committed Capital are often referred to as quote unquote dry powder.

The holding period is the period during which the portfolio companies are held by the fund during this period the fund will monitor the portfolio company and work closely with the portfolio company's management teams. Try and create value through various strategic initiatives. It will also work with management teams and external advisors to prepare it for its eventual sale this period ranges typically from three to seven years, but can be quicker for very successful deals or longer if an investment underperforms.

Monitoring of Investments is usually done by the investment team at the Pea fund. This is via mix of board participation and frequent direct interaction with management. Sometimes as regularly as on a daily basis.

The deal team will have access to financial information through the CFO and normally receives dashboard reports as frequently as needed. But at the very least on a monthly basis.

To make the internal analysis easier for the PE firm kpis or key performance indicators that are important drivers for the business will be requested on a very regular basis.

The P firm will become extremely close with the company and intimately familiar with ongoings at the company as well as within the industry part of this information will be shared with LPS in regular reporting.

PE firms have different methods of reporting investment activities to LPS. However, typically this will include monthly or quarterly reports which include high level financial information and significant developments. The financial information will revolve around the p&l treasury Capital expenditures and debt levels.

Developments would include anything material that has transpired at the company since the last reports. This could include for example, m&a activity management changes new strategic initiatives major industry changes or reasons for poor performance.

Annual reports that are longer in length and typically hold full year financial information all three financial statements with explanations as well as valuation updates on the investment using multiple methods such as comparables analysis or DCF valuations.

There will also be more detail on the company's accomplishments during the year and all material changes that occurred.

Quarterly or annual meetings and discussions which accompany the written report here the partners in charge of Investments and oftentimes CEOs of the Investments are required to give presentations to investors and field any questions with good answers.

Audited Financial reports are available whenever they're finalized.

The divestment period is when the GP tries to exit its Investments profitably within the terms of the fund the exits form an important part of the investment thesis right from when the initial investment is made.

Following a full or partial sale. The money is not reinvested into further Investments as would be the case in a typical mutual fund but rather invested capital and profits are returned to the LPS and GP.

Sometimes the fund can extend its life for a few years in order to have more time to exit Investments and in order to avoid a forced liquidation.

The cumulative cash position of an investor in a PE generally follows a Jacob whereby cash flow is called over the investment period from the agreed committed Capital but then often at the same time is returned as individual Investments start to be divested as an example. If an investor commits 10 million to a fund they might receive calls for initial Investments of two and three million in years one and three of the fund by the time they receive a call for 2.5 million for the third investment in year five the first two Investments, they made were sold or exited and return 10 million altogether essentially a return of two times the initial Capital both those deals this Junction. The investor would have Capital calls of 7.5 million. However, they also receive distributions of 10 million from the exits. Therefore the net contribution would actually be negative 2.5 million or 2.5 million in the investors favor.

If a fund performs well as time goes by the fund invests and divests the distributions.

The investor receives overtakes the capital cause creating the Jacob.