Read a capital account or investment account statement

By the end of this guide you'll know what each line of your investors' statement means, whichever statement you chose for the holding, so you can check a statement before you send it and answer your investors' questions about it.

Know which statement a holding uses

Covercy One offers two statements. You choose one per holding, and you can't add, remove or rename their lines.

• Capital Account Statement (ILPA): follows the ILPA reporting template. It reconciles each investor's net asset value (NAV) and their commitment. It isn't available for an evergreen (open-ended) holding.
• Investment Account Statement: shows each investor's investment account, which is what they contributed less the capital returned to them, with any transfers. It doesn't use net asset value or a price per unit, so it suits holdings the ILPA statement doesn't fit, such as evergreen funds. It isn't available while any position in the holding includes a gross-up or bonus.

Both statements share the same layout. Each is stated "As of" the end of a quarter and has three columns: quarter to date, year to date and inception to date. Each column shows the dates it covers, and the closing balance is the same in all three. Read each column from top to bottom: the opening balance, plus or minus the period's movements, reaches the closing balance. Amounts are in the holding's currency, and reductions appear in parentheses.

Read a Capital Account Statement (ILPA)

The statement has two blocks, followed by figures shown outside them. Line labels follow the ILPA template's own wording.

NAV Reconciliation

This block shows how the investor's net asset value moved from the start of each column's range to its end.

1. Beginning NAV – Gross of Accrued/Earned/Paid Carried Interest: the investor's net asset value at the start of the column's range. It shows zero when the range starts before the investor's first activity in the holding.
2. Contributions: cash the investor contributed in the range.
3. Distributions: what the investor was distributed in the range, shown as a reduction. It includes any tax withheld on the investor's behalf and excludes the GP's promote.
4. Partner transfers: the capital account the investor received or gave up through an ownership transfer, as one net figure. Capital received by transfer appears here, never as a contribution or distribution.
5. Management fees and partnership expenses: fees and fund expenses you recorded for the holding in the range, each on its own line under its group heading and shown as a reduction. These lines appear only when you've recorded such charges.
6. Interest Income: on a debt share class, interest you posted in the range, whether it was paid to the investor or added to their principal. It appears only when there is debt interest.
7. The change in value: the remaining movement that brings the column to its closing NAV. It isn't only a change in unrealized value: it also takes in fees, expenses and other items that aren't shown on lines of their own, and the statement says which categories it includes.
8. Ending NAV – Gross of Accrued/Earned/Paid Carried Interest: the investor's net asset value at the end of the period, before any carried interest is deducted. For a unitized class it's the value of the investor's units at the share class's price per unit; for a debt class it's the investor's principal.

Commitment Reconciliation

This block shows how much of the investor's commitment remains unfunded.

1. Total commitment: the investor's commitment. It's the figure the block is measured against, not a step in the roll.
2. Opening unfunded commitment: the part of the commitment the investor hadn't yet contributed.
3. (Less Contributions): the contributions made in the range, which reduce the unfunded commitment.
4. Other unfunded adjustment: the effect of an ownership transfer on the unfunded commitment, when there is one. Transferring a fully funded position doesn't change it.
5. Closing unfunded commitment: what's left to contribute.

Unfunded commitment is measured on contributions, not on capital called, so a capital call that hasn't been paid yet doesn't reduce it. The unfunded commitment lines are labelled to show that they're measured this way.

Figures shown outside the blocks

Some figures aren't lines of the ILPA template, so they appear below the two blocks rather than inside them, and aren't part of either block's roll:

• The units the investor holds.
• Accrued preferred return. On a debt class this reads Interest accrued since last posting: interest that has built up since you last posted interest. It isn't part of the NAV until you post it.
• Tax withheld, labelled as part of distributions. It's already included in the Distributions line, so don't add the two together.
• GP promote, and the split of distributions by type.
• A note that the NAV figures reflect fund-level fees and expenses.

Read an Investment Account Statement

The statement is titled Investment Account Statement, and on your investors' report page its section reads Your investment account statement. It has two sections and shows no net asset value and no units.

Investment Account Summary

1. Beginning Investment Account Balance: the investor's investment account at the start of the column's range.
2. Contribution: cash the investor contributed in the range.
3. Capitalized interest: interest on a debt class that was added to the investor's principal in the range. It appears only when there is some.
4. Return of capital: capital returned to the investor in the range, shown as a reduction.
5. Transfers: the investment account the investor received or gave up through an ownership transfer. It appears only when it isn't zero.
6. Ending Investment Account Balance: the investor's investment account at the end of the period, the same in all three columns. It matches the principal shown for the investor elsewhere in Covercy One.

Below the ending balance, still in this section, Distributions shows the preferred return and profit distributions paid in each range, before tax withheld. When tax was withheld, Tax withheld (included in distributions) follows it. Neither line changes the investment account balance, because income distributions don't return capital. A return of capital appears only on its own line above, never under Distributions.

Capital Commitment and Contribution Summary

These figures are balances at the end of the period, so each appears once, in the inception-to-date column:

• Total Capital Commitment: the investor's commitment.
• Capital Contributed: the cash the investor has contributed since inception.
• Unfunded Commitment: the part of the commitment not yet contributed. Like the ILPA statement, it's measured on contributions, not on capital called.
• Percentage of Capital Commitment Contributed: how much of the commitment has been contributed, as a percentage.

Read the breakdown by share class and position

When an investing entity holds more than one position in the holding, a breakdown appears below its statement. An entity with a single position has no breakdown, because it would only repeat the statement.

1. Find the breakdown below the statement. It's labelled as a supplemental breakdown, not as part of the statement.
2. Expand a share class row to see the entity's figures in that class, then expand it further to see each of the entity's positions in the class.
3. Read each row with the same lines and labels as the statement above it, covering only that class or position.
4. Check each position's status on its row: open, closed (with the reason and date), received through a transfer, or the part kept after a partial transfer. A position that was fully transferred out shows zeros together with its closed status.

Check the disclaimer and what your investors see

If you wrote a disclaimer in the holding's statement settings, it appears beneath the statement, exactly as you wrote it, on the Statement tab, in your preview of a recipient, and on your investors' report page and PDF. Investors who hold more than one position can download their PDF with or without the breakdown by position.

To confirm a statement before you send a report, open the holding on the Capital Ledger's Statement tab, choose the investing entity and the quarter, and compare it with your preview of that recipient in the report. If an investor can't receive a statement, the Statement tab lists why; see the Review the capital ledger article. If a figure looks wrong, trace it in the Capital Ledger's Ledger detail tab and correct the record it comes from. If you're still stuck, contact Covercy support.