I am trying to figure out how to model a private equity type of investment in Capitally.

I am a limited partner in a fund that invests in startups. The fund had 3 capital calls. So I invested money at three points in time. The fund is periodically valued. The fund also has periodic distributions. This happens when one of their portfolio companies is acquired, or goes out of business and returns money to investors. Initially, these distributions are like a return of capital. If all goes well, ultimate the entire investment is distributed, and any additional distributions then become capital gain.

There is no concept of shares. It is just an invested amount and current value, which is updated quarterly., both are in dollars. At each capital call, I deposit more funds, so the invested amount goes up. The distributions do not change the original invested amount. They may change the current value. Does that help?

But do I understand correctly, that if a company is liquidated, the money goes to you directly and is not available for the fund to reinvest? So your currently invested principal goes down, and the fund’s current value goes down as well. And eventually all the money from the fund may be (but doesn’t have to) entirely distributed and you stop owning any of it.

A custom asset (e.g. Venture, Fund or Other) with manual pricing

First investment is a Buy, with quantity being the amount of $ and price set to 1

To update the fund value, you can double-click the position, add an Account Balance transaction or add the price directly in the asset’s price table. The price will be Market value / Current principal. So if you’ve invested $100 and it’s worth $150, the price will be $1.5

Each Capital Call is a Buy as well, again with quantity being the amount of $ and price set to the current market price calculated as above. I assume that when you add more money it will dilute the return, so you should calculate the price at this point. Tip: you can do math directly in all input fields.

Each Distribution is a Sell. All the above rules with quantity and price still apply.

You don’t have a Return of Capital transaction? Because it may be better to model each distribution as a return of capital until all capital is returned and then model subsequent distributions as dividends or other income.

Return of capital is different from dividend in that it lowers your cost basis. Even publicly traded stocks at times have a ROC corporate action.

No, only Sell & Transfer will lower the quantity currently. A more proper P.E. support is planned for later (different kinds of corporate actions as well).

A Return of Capital (ROC) does not lower the quantity. It lowers the cost basis. If you hold 1,0000 shares that you purchased for $15,000, and you have an ROC of $100, then your cost basis becomes $14,900. The quantity remains the same.

Just as an aside, ROC transactions are not limited to PE investments. Even publicly traded securities occasionally have these, like preferred stocks, closed-end funds, publicly traded partnerships. I have seen it a few times. You may want to detach this transaction type from the bigger PE support item and implement it separately if you have a chance. StockMarketEye had it.