A commitment (or capital commitment) is the total amount an LP agrees to invest in a private equity fund at the time of signing the Limited Partnership Agreement (LPA). The commitment is not paid upfront: it is called (drawn down) by the GP over the investment period (typically 5 years) in tranches as capital is needed to make investments, pay management fees, and cover fund expenses. The difference between the committed capital and the paid-in capital at any given time is the "uncalled capital" — the LP's remaining obligation.

Drawdown notices (capital calls) are typically issued 5–15 business days before the funds are required. LPs are contractually obligated to fund capital calls on time; failure to do so triggers default provisions in the LPA, which may include: interest on the late payment, forced sale of the LP's interest at a discount, forfeiture of distributions, and in severe cases, exclusion from the fund. LP treasury management must therefore maintain sufficient liquidity to meet capital calls — a challenge when commitments span multiple funds with unpredictable call timing.

The commitment-to-drawdown ratio is a key dimension of LP portfolio construction: committing to a CHF 10 million fund does not mean CHF 10 million is immediately invested and unavailable. The LP's actual exposure builds progressively over 5 years, allowing the LP to run an over-committed portfolio (committing more than currently investable capital, relying on distribution timing to fund future calls). For Franco-Swiss family offices and HNWI investors, commitment management and liquidity planning is a central advisory topic at Hectelion.

At Hectelion, we advise LP investors on commitment management, drawdown planning and portfolio construction in our LP advisory mandates.