Make Distributions to the Fund's Investors

Provided by Leslie Cummins and Peter Tropper of the International Finance Corporation

In this section you will learn more about:

Objective of Distributions

To return capital, dividends, capital gains, interest (where applicable) etc. to the Fund’s Investors.

Issues to Consider

Check the Fund’s legal agreements, which may specify how the distributions should take place (this is called the waterfall). They may specify the number of days advance notice must be given to the Investors prior to distributing the cash. Check also any side letter agreements you may have for distribution specifications.
Who within the Fund Manager back office team is responsible for distributions? Are these managed by your staff or by an external Fund administrator to which this task has been outsourced?
Are your cash management systems in place to handle distributions and cash balances?
Prepare your distribution notice carefully, and ensure that it provides as much detail as possible about what you are distributing and why. If you are distributing a net amount, be explicit and detailed about why and how much.
Ensure that a capital account accompanies each distribution notice sent to your Investors.
Do you have the requisite contact information (name, address, email, fax, etc.) to send the distribution notice to each of your Investors?
Do you plan to courier, mail, fax, or email the distribution notice?
Anticipate any questions your Investors may have about the distribution

Documents