Limited Partners Reporting: Tips and Best Practices for Effective Communication

Venture capital investment isn’t just about finding unicorn business ventures and reaping the rewards. Before seeing any returns, VCs must be on top of any relationships they have concerning their investment.

Roles of General Partners (GPs) and Limited Partners (LPs)

One of the most important relationships within a VC fund is between General Partners (GP) and Limited Partners (LP), a relationship that shapes how the fund operates and succeeds.

Limited Partners, also known as “silent partners,” purchase shares in exchange for partial ownership in a company. However, Limited Partners aren’t involved in day-to-day operations.

General Partners, on the other hand, are deeply involved. As the active managers of the fund, GPs are responsible for raising capital from LPs, sourcing and investing in high-potential startups, supporting portfolio companies, and ultimately delivering returns to their investors. Their day-to-day involvement and strategic guidance are what drive the fund’s performance.

General Partner (GP) ResponsibilitiesDescription
Fundraising
Raise capital from Limited Partners (LPs) to establish and grow the fund.
Investment Decisions

Source, evaluate, and invest in high-potential startups or companies
Portfolio Support

Provide strategic guidance, operational support, and access to networks for portfolio companies
Returns Management

Oversee exits and ensure profits are distributed back to LPs
Ongoing Fund Management

Handle reporting, compliance, and day-to-day operations of the fund

In short, LPs provide the investment, while GPs put that capital to work. Understanding how these roles interact is key to grasping the dynamics of any VC fund.

Key Components of a Limited Partner (LP) Report

A Limited Partner (LP) report is a critical document in venture capital (VC), designed to keep LPs updated on a fund’s performance and key activities. These reports are valued for their transparency, clarity, and thoroughness, qualities that help build trust and maintain strong investor relationships.

What’s Included in an LP Report?

SectionKey Details
Fund OverviewPerformance highlights, total commitments, goals for the period
Financial OverviewIRR, MOIC, Fair Value, Cash Realized, NAV, cash flow summary
Capital ActivityCapital called, distributions made, remaining commitments
Expenses & FeesManagement and performance fees, fund expenses
Portfolio UpdatesNew and follow-on investments, exits, valuation changes, and company milestones


A. Fund Overview

  • High-Level Overview: A snapshot of the fund’s performance, significant exits, new investments, and market trends affecting the portfolio.
  • Total Commitments: Brief mention of the total capital committed to the fund to provide context about its size and scope.
  • Objectives and Goals: Overview of what the fund aims to achieve in the upcoming period.

B. Financial Overview

1. Fund Performance Metrics: 

  • Internal Rate of Return (IRR): Gross IRR and Net IRR to capture performance.
  • Multiple of Invested Capital (MOIC): To understand how much value has been generated from the invested capital.
  • Fair Value: An assessment of the current value of the portfolio.
  • Total Cash Realized: Cash distributions received from the portfolio investments.
  • Net Asset Value (NAV): Current value of the portfolio.
Example of Fund performance table in Rundit

2. Cash Flow Summary: High-level overview of cash inflows and outflows during the period, along with the opening and closing cash balance.

Example of Cash flow summary in Rundit

C. Capital Calls and Distributions

1. Capital Called: Amounts called during the period, with a breakdown by purpose.

2. Distributions Made: Details on distributions returned to LPs, categorized by source (e.g., exits, dividends).

3. Remaining Commitments: Indication of uncalled commitments and potential future capital calls.

Example of Capital Account in Rundit

D. Expenses and Fees

Transparency on management fees, performance fees, and other costs.

Example of Fund expenses and Fees in Rundit

E. Portfolio Updates

1. New Investments: Description of new companies added to the portfolio.

2. Follow-on Investments: Additional investments in existing portfolio companies.

3. Exits: Companies sold or gone public and the returns generated.

4. Valuation Changes: Significant changes in portfolio company valuations.

5. Portfolio Performance: News, milestones, and updates on the entire portfolio or individual company performance.

Example of Portfolio performance table in Rundit

LP Reporting Expectations are Evolving

Limited Partners (LPs) have increasingly diverse and demanding reporting requirements. General Partners (GPs) are expected to deliver detailed reports in line with frameworks such as ILPA and Invest Europe. As LPs seek more frequent and granular insights, sometimes even beyond the traditional quarterly cadence, operational efficiency has become a key evaluation criterion for fund managers.

While GPs are committed to meeting these expectations, preparing accurate, comprehensive reports is no small task. Ensuring data quality, formatting consistency, and timely delivery can be both time-consuming and resource-intensive.

How to make LP Reporting a breeze?

The LP report is an important way for your VCs to keep your investors informed and maintain strong investor relations. Some VC firms may also use automated tools, such as Rundit’s LP report feature, to help generate, organize, and share the necessary information with their LPs. Rundit’s interactive LP report allows VCs to structure aggregated data for easy sharing with their LPs.

Conclusion

Maintaining healthy relationships and engaging with Limited partners is crucial for General partners. Thus, creating an LP report that stands out is one way to achieve this goal. It helps your VC manage investment data, stay organized, and meet LP reporting requirements.

Are you looking for an efficient way to create and share LP reports with your Limited Partners? Book a call today and let us walk you through our LP reporting functionality.

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Automate your LP reporting

Consolidate your portfolio and fund data in one single report.

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