How do I add/edit Capital Commitments?

Capital Commitments typically provide a specified amount of capital for a real estate investment fund or project. The capital is drawn down by the fund manager over time. In this article, read how to track this in your investment management tool.

On the Covercy platform, General Partners (GPs) can add commitments manually through the “Overview” tab in the holding screen by clicking on “+ Commitment” inline in the table or by clicking on the top right button for managing commitments.

Both actions open the same screen → New screen for editing commitments.

Generally, we do not force the GP to add commitments or that commitments will always be greater than contributions. We only alert the user for discrepancies but allow the users to do as they wish.

Note: this feature set is included in the Pro Subscription package.

Can I add additional commitments directly within the Capital Call Fundraising process?

Yes the Covercy Platform allows for updates or additions to commitments directly within the capital call and fundraising process. A "Total Commitment" field has been added alongside the "Estimated Investment Amount" field, enabling users to update their commitments.

It's important to note that the figure entered should reflect the total amount committed, not just the additional amount.

Can ownership percentages be based on commitments rather than contributions?

Yes you can calculate ownership percentages based on commitments rather than contributions. While contributions will remain the default method of calculation, the GP has the option to switch to commitments. This change will be reflected across all platform sections where ownership is displayed, such as the Overview page and the Waterfall.

This setting can be adjusted during the initial creation of a new deal or within the deal's editing section. If the ownership calculation is switched to "by commitments" and any commitments are missing for some investors, those will be assumed to be $0.

Can ownerships transfer and how does that work?

Yes, ownership can transfer on the Covercy Platform. By default, transferring ownership will transfer equivalent portions of both the commitment and the contribution. For example, if an investor has committed $1 million and contributed $500,000 so far, and now wishes to transfer 50% of their stake in the deal to another investor, the default action will transfer 50% of both the commitment and the contribution to the new investor. This means $500,000 of the commitment and $250,000 of the contribution will be transferred. The transferring party has the option to reduce the amount of the commitment being transferred but cannot decrease it below the amount already contributed.

Example Scenario:
An investor committed $1M and contributed $500K and wants to transfer 50% of their stake:

• $500K (50%) of the commitment will be transferred.

• $250K (50%) of the contribution will be transferred.

• The transferring party can adjust the amount of commitment provided it is not less than the amount already contributed.