Policy clause
"Unfunded commitments no more than 30% of the portfolio": how to write it, test it and evidence it
An unfunded-commitment cap limits capital promised to private funds but not yet drawn, relative to the portfolio. It becomes testable once each fund's undrawn amount is stated and current. Acclimetry's commitment limit sums the unfunded commitments the positions state over net value; it does not forecast capital calls.
Unfunded commitments to private market funds may not exceed 30% of the portfolio's value.
commitment_limitQuestions to settle before it can be tested
- Source and date: undrawn amounts come from capital-account statements, often a quarter old. The policy should say which statement counts.
- Recallable distributions: are they added back to the unfunded amount?
- Denominator: the whole portfolio, or the liquid assets that will meet the calls? Acclimetry divides by net market value.
- Currency: a dollar commitment moves with the exchange rate.
As a testable rule
Commitment limit template, classes Private equity, Private credit and Infrastructure, measure unfunded commitment: the stated undrawn amounts over the portfolio's net market value. Hard maximum 30%, warning maximum 25%. A fund in those classes stating no unfunded amount is a gap, though a partial sum already over 30% still proves the breach.
A testable wording
Unfunded commitments, as stated in each fund's latest capital-account statement, may not exceed 30% of the portfolio's market value. A new commitment that would breach this needs prior committee approval.
Pair it with a vintage-year limit; the unfunded commitment entry defines the term.
Worked example
Undrawn commitments of 11.1m against a 40m portfolio are 27.75%: inside the 30% cap but past the 25% warning.
Rule template:commitment_limit classNames: Private equity, Private credit, Infrastructuremeasure: unfunded
Bounds: warn max 25% · hard max 30%
| Holding | Class | Market value | Commitment | Unfunded commitment |
|---|---|---|---|---|
| Listed equities | Equities | 18,000,000 | – | – |
| Bonds | Bonds | 9,000,000 | – | – |
| Cash | Cash | 3,000,000 | – | – |
| Private equity fund 2024 | Private equity | 4,500,000 | 10,000,000 | 5,200,000 |
| Private credit fund 2023 | Private credit | 3,000,000 | 6,000,000 | 2,600,000 |
| Infrastructure fund 2025 | Infrastructure | 2,500,000 | 6,000,000 | 3,300,000 |
| Group | Status | Value | Bounds | Headroom to the hard bound | Code |
|---|---|---|---|---|---|
| Commitments | Warning | 27.75% | ≤ 30% warning ≤ 25% | 2.25% -2.75% to warning | ABOVE_WARNING_MAXIMUM |
ABOVE_WARNING_MAXIMUM: The measured value has crossed the early-warning maximum but not the hard limit.
Largest contributors: Commitments → Private equity fund 2024 13%, Infrastructure fund 2025 8.25%, Private credit fund 2023 6.5%
Computed at build time by the Acclimetry rule engine (backend commit 8197063); the same code runs in the product.
What each monitoring run records
Each run stores the unfunded ratio, its state, headroom and each fund's share as contributors, with counts of funds measured and amounts missing. Pacing decisions stay with the committee; the rule records where the programme stands. A breach opens a case like any other limit.