What is a closing in an investment fund?
A closing is always a celebratory moment in the lifecycle of an investment fund. It marks the completion of the fundraising process, after which the fund can officially start investing.
At least, that’s the theory. In practice, multiple closings often take place during the fundraising process. For example, we distinguish between a first closing, several interim closings, and a final closing. These moments are not only important milestones and so-called champagne moments but also serve as clear administrative deadlines by which all signed contracts must be submitted.
The different types of closings
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First Closing
The first closing marks the initial round of commitments by investors. This allows the fund to start its investment activities. In this round, existing relationships of the fund participate, as well as investors who were on the waiting list for previous funds. -
Interim Closings
During interim closings, additional capital is raised from new investors. To keep the process administratively manageable, several interim moments are scheduled. This helps spread the workload of the fundraising process. -
Final Closing
The final closing marks the end of the fundraising period. At this point, the fund's total available capital is definitively established.
What should private investors pay attention to?
As a private investor, there are a few important things to keep in mind:
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Register on time
Make sure to submit your registration and documentation on time. If you miss the closing, unfortunately, you cannot participate in the fund. Your contact person at Marktlink Capital will keep you informed about the process and the dates of the (interim) closings. -
Benefit of an early closing
It may be financially advantageous to join at the first closing. Often, later entrants are required to pay an equalization fee. This makes sense: early investors make their capital available for a longer period and receive compensation for this. -
Don’t wait too long for the final closing
Waiting until the final closing is not without risk. Once the fund reaches its maximum size, participation can no longer be guaranteed.
