Key terms and definitions for private equity, real estate, and private debt fund management.
50 terms across 11 categories
Physical or traditional financial assets — such as real estate, private credit, commodities, and fund interests — that are represented as digital tokens on a blockchain.
The process of converting rights to an asset — such as fund interests, real estate equity, or debt instruments — into a digital token on a blockchain.
A digital token on a blockchain that represents ownership in a regulated security — such as fund interests, equity, or debt — and is subject to securities laws.
An Ethereum token standard designed specifically for compliant security tokens, embedding identity verification and transfer restrictions directly into the smart contract.
Self-executing code deployed on a blockchain that automatically enforces the terms of an agreement — such as distribution calculations, compliance checks, or transfer restrictions.
The underlying network and consensus rules that power a distributed ledger — such as Ethereum, Polygon, or Avalanche — on which tokenized assets are issued and transferred.
Securities — such as fund interests, bonds, or equity — that are issued, recorded, and transferred using blockchain technology instead of traditional paper or book-entry systems.
Dividing an asset or investment into smaller units so that multiple investors can own a portion — enabled by tokenization to lower minimums from $500K+ to $10K-$50K.
Using price-stable digital currencies (pegged to USD, EUR, etc.) for cross-border fund transactions — capital calls, distributions, and investor payments — with near-instant settlement.
An ecosystem of financial applications built on blockchains that operate without traditional intermediaries — offering lending, trading, and yield generation through smart contracts.
The EU's comprehensive regulatory framework for crypto-assets and digital securities, establishing licensing, transparency, and consumer protection requirements across all member states.
Regulatory requirements that fund managers must follow to verify investor identities and screen for sanctions, politically exposed persons, and illicit financial activity.
The process of verifying that a fund's operations, investor onboarding, and reporting meet regulatory requirements across all applicable jurisdictions.
The process of monitoring whether borrowers in a private debt portfolio are meeting the financial and operational conditions required by their loan agreements.
An individual or entity that meets SEC-defined financial thresholds — allowing them to invest in private offerings that are exempt from full registration requirements.
The total value of a fund's assets minus its liabilities, calculated per share or per unit to determine what each investor's stake is worth.
A tiered payout structure that determines the order and proportion in which fund profits are distributed between LPs and GPs.
The share of fund profits (typically 20%) that the GP earns as performance-based compensation after returning LP capital and meeting preferred return thresholds.
The minimum annualized return (typically 6-8%) that LPs must receive before the GP earns any carried interest.
A running ledger tracking each investor's economic position in a fund or SPV — including contributions, distributions, allocated gains and losses, and fees charged.
A contractual obligation requiring the GP to return previously received carried interest if subsequent fund performance falls below the agreed return thresholds.
The minimum rate of return a fund must achieve before the GP earns carried interest — typically 6–8% annually in private equity and real estate funds.
The annual fee (typically 1.5–2% of committed or invested capital) charged by the GP to cover the fund's operating expenses, salaries, and overhead.
The GP's or sponsor's share of profits above a preferred return threshold — functionally equivalent to carried interest, most commonly used in real estate fund structures.
A formal notice from a GP to LPs requesting the transfer of committed capital to fund investments, fees, or expenses.
The operational backbone of a private fund — encompassing accounting, NAV calculation, investor reporting, compliance, and regulatory filings.
The total amount of capital an LP pledges to a fund, which is drawn down over time through capital calls as investments are made.
The legal and operational process of structuring and launching a new private fund — including entity setup, documentation, regulatory filings, and initial fundraising.
The legal document an investor signs to commit capital to a fund, containing their investment amount, representations, and eligibility certifications.
The formal process of winding down an SPV after the deal exits — calculating final distributions, generating closing statements, and terminating the legal entity.
The transfer of committed capital from LPs to the fund in response to a capital call, representing the conversion of a commitment into funded investment.
A proportional allocation method where each investor's share of capital calls, distributions, or expenses is calculated based on their percentage of total commitments.
A designated person or service that receives legal documents, regulatory notices, and official correspondence on behalf of a fund or SPV entity in its jurisdiction of formation.
An investor in a private fund who contributes capital but has no role in day-to-day management, with liability limited to their committed investment.
The fund manager responsible for making investment decisions, managing operations, and reporting to LPs, who bears unlimited liability for the fund.
The legal disclosure document provided to prospective investors in a private fund, detailing the fund's strategy, terms, risks, fees, and regulatory exemptions.
A separate agreement between a GP and an individual LP that grants specific terms — such as reduced fees, enhanced reporting, or co-investment rights — outside the main fund documents.
A standalone legal entity created for a specific investment or deal, isolating the asset and its associated risks from the sponsor's other activities.
A direct investment by an LP alongside a fund's main position in a specific deal, typically structured through a separate SPV with reduced or no management fees.
The process of pooling capital from multiple investors for a specific deal, typically structured through an SPV where each investor knows exactly what asset they are funding.
A record of all investors in a fund or SPV, showing each investor's ownership percentage, capital contributions, and distribution entitlements.
A fund structure where investors commit capital before specific investments are identified, granting the GP discretion to select deals within the fund's mandate.
The governing legal document that defines a fund's terms — including GP authority, fee structure, waterfall mechanics, investment restrictions, and LP rights.
A secure, branded web platform where LPs access fund documents, performance reports, capital account balances, and communications from the GP.
A technology platform that a fund manager deploys under their own brand — with their logo, colors, and domain — while a third-party provider supplies the underlying infrastructure.