Capital call
A request from the GP for LPs to wire a portion of their committed capital, issued as the fund actually deploys it into deals.
When you commit capital to a fund as an LP, you don't wire the full amount immediately. Instead, the GP issues capital calls over the fund's investment period — typically 3–5 years — drawing down your commitment in tranches as it closes new deals or covers management fees.
This structure lets LPs keep uncalled capital invested elsewhere (or simply liquid) until it's actually needed, rather than having it sit idle inside the fund waiting to be deployed. Missing a capital call is a serious default under most fund agreements, with real financial penalties — so LPs need to plan liquidity around the calls, not just the total commitment.
Why it matters
Before committing as an LP, understand the expected capital-call schedule and make sure you can actually meet calls when they land — funds don't forgive a missed call just because your other investments happen to be illiquid at the same moment.