How to use the cash reserves modeling tool
The Cash reserves tool was created to provide an estimated amount of total investment potential for fund administrators.
Using data from the general ledger, Carta is able to pull in key metrics to help you analyze how much more capital can be invested into portfolio companies or fund investments, as well as how much can be retained vs distributed to partners during the life of the fund.
Due to pulling directly from the general ledger, the majority of the fields are not editable. However, future fees, expenses, and retention targets can be set in the modeled column to help tailor the estimates more closely to your expectations. The retention target cannot be set higher than what is permitted by the fund’s LPA.
Key Terms/Metric Calculation
Committed capital: The sum of all fund commitments, including the general partner
Called capital: The sum of all capital called from the partners, excluding prefunded amounts
Amount invested: The total amount of capital invested into portfolio companies and/or fund investments
Fees and expenses to date: The total amount of all expenses and management fees the fund has paid
Recycled/retained capital to date: Cash proceeds from portfolio companies or fund investments that have not been distributed to partners
Unfunded commitment: Committed capital - called capital + recallable distributions
Cash balance: The balance in the cash account on the general ledger
Future management fees: Estimated amount of management fees to be paid by the fund for the remainder of the fund’s life. If the fund administrators are using the in-app management fee calculator, this amount will pre-populate from there. If they are not, this amount is estimated as 2% annually of limited partners’ commitments for 10 years.
Future expenses: Estimated amount of expenses to be paid by the fund for the remainder of the fund’s life. This is estimated as 1% of partners’ commitments annually for 10 years.
Recycling/retention target: This is pre-populated from fund properties, if applicable
To be recycled from future proceeds: Committed capital x Recycling target - recycled to date
Available for future investment with recycling: Unfunded commitment + Cash balance - Future management fees - Future expenses + To be recycled from future proceeds