Waterfall calculations, multi-entity structures, cross-border distributions, and capital account management — automated end-to-end with an immutable audit trail. Your LPs can verify every number independently.
Fund administration sits at the intersection of everything that matters — investor capital, regulatory compliance, tax obligations, and the performance numbers your LPs use to make re-commitment decisions. Yet for most fund managers, it remains the least automated, most error-prone function in their operation.
The typical fund administration workflow relies on spreadsheets that grow more fragile with every new investor, every new fund, and every new distribution period. Waterfall calculations are built in Excel by one person and understood by one person. NAV computations depend on manual data entry from multiple sources. Tax reporting requires re-keying the same data into different formats for different jurisdictions. And when an LP asks a question about their capital account, your team spends hours tracing numbers back through nested formulas.
This is not a technology problem — it is a risk management problem. A single error in a waterfall calculation can trigger clawback provisions, damage LP relationships, and create regulatory exposure. A missed tax deadline generates penalties. An inconsistent NAV report undermines the credibility your firm depends on for future fundraising. Automation eliminates these risks not by replacing your team's judgment, but by ensuring the math is always correct and always auditable.
Every function below runs from the same source of truth, with every calculation traceable back to the underlying transaction.
Configure your waterfall once. PoliBit calculates every distribution, generates LP-level breakdowns, and maintains a complete audit trail.
European (whole-fund) waterfalls calculate carry based on aggregate fund performance — the GP earns carry only after all invested capital plus preferred return has been returned to LPs across the entire fund. American (deal-by-deal) waterfalls calculate carry on each investment independently, allowing the GP to earn carry as individual deals are realized. PoliBit supports both structures with full configurability, and hybrid models where different deal types follow different waterfall paths within the same fund.
Set preferred return rates as fixed annual percentages, compounding or simple, with day-count conventions matching your LPA. The platform supports tiered hurdle structures where the preferred return rate changes based on total return thresholds, as well as time-weighted hurdles that adjust based on the investment holding period. Every hurdle calculation is auditable back to the specific capital contribution dates and amounts used.
Configure catch-up provisions as a percentage of distributions allocated to the GP after the preferred return is met. The platform supports full catch-up (100% to GP until carry split is reached), partial catch-up (shared between GP and LPs at a configurable ratio), and tiered catch-up structures with multiple thresholds. Catch-up calculations account for prior distributions and are recalculated automatically when prior-period adjustments occur.
Carry allocation follows your LPA terms — standard 80/20 splits, tiered carry based on return thresholds, or custom structures. Clawback provisions are tracked automatically: the platform maintains a running clawback reserve calculation based on the difference between carry received and carry earned on a whole-fund basis. If a clawback event is triggered, the system calculates the exact amount owed and generates the corresponding notices.
Management fee offsets, transaction fees, monitoring fees, and broken-deal expenses are allocated according to your LPA provisions. The platform tracks fee income against offset obligations, applies expense allocations pro-rata or per the specified methodology, and reflects all fee-related adjustments in both the waterfall calculation and individual capital account statements. No fee-related adjustment requires manual spreadsheet work.
Real fund structures are not flat. A single fund manager may operate a master fund with multiple feeder vehicles, side-car SPVs for co-investment deals, and trust structures required by specific jurisdictions. Each entity has its own regulatory requirements, tax treatment, and reporting obligations — but they all share the same underlying portfolio.
PoliBit models your structure as it actually exists. LP commitments flow through the entity hierarchy, NAV calculations cascade from portfolio company valuations through each intermediate entity, and distributions are routed according to each entity's governing documents. When a portfolio company valuation changes, every entity in the chain updates automatically — no manual consolidation required.
See where automated, purpose-built fund administration outperforms the alternatives managers typically rely on.
See how fund managers have cut administration costs by 60% with PoliBit's automated operations.
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