In AIFs, you don’t typically hand over all your money on day one. Instead, you make a commitmentÑan agreement to invest a certain amount over the fundÕs life. The fund manager then issues capital calls (or drawdowns) when they find a suitable investment opportunity.
You are only charged fees on the drawn capital (the money they’ve actually called) or the committed capital, depending on the fundÕs terms. This structure is a benefit to the investor, as the undrawn portion of their commitment can remain invested in liquid assets until needed by the AIF, optimizing capital efficiency.
