How to read a quarterly fund report and capital account statement

A quarterly fund report has two parts that deserve different amounts of trust. The capital account statement says what you paid in, what you got back and what your share is said to be worth; the letter and the portfolio pages explain it. Read the statement first, reconcile three numbers with your own record of cash flows, and only then read the story. Most of the surprises an LP meets are in the statement, and almost none are in the letter.

The reports for the third quarter are arriving about now. A report as of 30 September usually reaches investors between mid-November and the end of the year, which is the first thing to keep in mind: every figure in it is already seven to twelve weeks old.

What the capital account statement contains

The capital account statement is the page, often an annex, that shows your individual position rather than the fund's. It normally has a column for the quarter, one for the year to date and one since inception, and it runs from the opening balance to the closing balance: contributions, distributions, management fee, other expenses, realised and unrealised gains, and the carried interest accrued to the general partner. The closing balance is your NAV.

Four figures matter before all others. Your commitment. Your paid-in capital, the sum of every call you have wired. Your cumulative distributions. And the NAV. Everything else on the page is either a component of these or a ratio built from them.

A worked example

Say you committed EUR 250,000 to a venture fund in 2021. The statement as of 30 September shows paid-in capital of EUR 180,000, cumulative distributions of EUR 45,000 and a NAV of EUR 190,000.

DPI is distributions divided by paid-in capital: 45,000 / 180,000 = 0.25. A quarter of your money has come back as cash. RVPI is NAV divided by paid-in: 190,000 / 180,000 = 1.06. TVPI is the sum, 1.31. The fund says you have made 31 per cent on paper, and four fifths of the total value is still an estimate.

Now the detail that the summary line does not show. Of the EUR 45,000 distributed, EUR 15,000 is marked as recallable. A recallable distribution is money the fund has paid out but may call again, typically proceeds from an early exit that the partnership agreement allows it to reinvest. Your unfunded commitment is therefore not 250,000 minus 180,000, but EUR 85,000: the 70,000 never called plus the 15,000 that can come back as a call. If you plan liquidity from the simpler subtraction, you are EUR 15,000 short. We described how to plan around that figure in planning liquidity for capital calls.

Why two reports can show different multiples for the same fund

Recallable distributions are also where conventions diverge. Some administrators leave paid-in capital and distributions as they are, as in the example. Others net the recallable amount out of both: paid-in becomes EUR 165,000, distributions EUR 30,000. The cash is identical, but the ratios move. DPI falls to 0.18 and TVPI rises to 1.33, because the same gain now stands on a smaller base.

Neither method is wrong. What matters is that you know which one your fund uses and that you compare funds on one method. An LP who holds eight funds and takes each TVPI from the report's front page is adding numbers built in two or three different ways.

Net and gross are different questions

The portfolio pages list each company with cost, fair value and a multiple, and usually end in a total: the gross multiple, say 1.6x. Your capital account shows 1.31x. The gap is management fee, fund expenses and accrued carried interest, and it is normal for it to be this wide in the first half of a fund's life, when fees have been paid on the whole commitment and only part of it is invested.

Gross figures answer whether the manager picks well. Net figures answer what you earned. Take your own net numbers from your own statement, not from the fund-level summary, even where the first page leads with a gross IRR. The fund-level net figure also blends investors who joined at different closings on different terms.

Check as well whether the NAV is stated after accrued carry. Most statements deduct it, some show it as a memo line beneath the balance. In a fund that has done well, with the customary carry of 20 per cent, the difference approaches a fifth of the gain.

Fees: inside or outside the commitment

A management fee of 2 per cent on a EUR 250,000 commitment is EUR 5,000 a year during the investment period, whether or not the fund has invested anything yet. In most funds it is drawn from your commitment, so it shows as part of paid-in capital and reduces what is left to invest. In some, and more often in feeder vehicles, the fee is charged on top. Then your total outlay over the fund's life exceeds the commitment, and a multiple calculated on paid-in capital alone flatters the result.

The statement tells you which case you are in: add up the fee lines since inception and see whether paid-in capital includes them. While you are there, look at the "other expenses" line. Organisational costs, broken-deal costs and the interest on a subscription line all pass through it.

The cross-checks that take ten minutes

Three reconciliations catch nearly everything.

1. Paid-in capital in the statement equals the sum of the call notices you have paid, to the euro. If it does not, a call after the reporting date, an equalisation payment for a later closing or a fee charged outside the commitment explains the difference, and you want to know which.
2. Cumulative distributions equal what arrived in your account, before any tax withheld. Note the recallable part separately.
3. The opening balance of this quarter equals the closing balance of the last report. Restatements happen, and a report rarely announces them.

Then bring the NAV forward. The report says 30 September; since then you may have paid a call or received a distribution. Your position today is the reported NAV plus calls paid since, minus distributions received since. Without that step, a call paid in October looks like a loss in your own overview until the next report arrives in February.

This is the comparison Valued makes when it reads a report: the stated paid-in, distributions and NAV are set against the cash flows already booked for the fund, and a difference is shown before anything is approved. The check itself needs no software. It needs a record of your own that does not come from the report.

What the valuation pages do and do not tell you

Unrealised value is the general partner's estimate under the fund's valuation policy. For a venture fund the usual anchors are the price of the last financing round and, between rounds, the manager's judgement. Two things are worth reading in the company table: how old the last round is for the largest positions, and how much of the NAV sits in the top three. A TVPI of 1.31 in which one company marked at a 2021 round carries half the value is a different asset from the same multiple spread across fifteen.

If the fund reports in dollars, the statement is in dollars. Your return in euros depends on the rate at each call and each distribution, which no fund report computes for you; this year that difference has been large, as we set out in the first half of 2025 for euro investors.

Will reports become easier to compare?

Somewhat. The Institutional Limited Partners Association published an updated Reporting Template and a new Performance Template in January 2025. They are meant for funds still in their investment period in the first quarter of 2026 and for funds starting from 2026, with the first deliveries for the Q1 2026 reporting period. The performance template asks for returns with and without the effect of subscription lines. Adoption is voluntary, and a small European venture fund may never use it.

Until then, the practical rule is to rebuild the four figures yourself for every fund, on one method, each quarter. With cash still coming back slowly, as we wrote in the distribution drought, the number to watch from report to report is DPI, the only one of the three multiples that nobody had to estimate.