# Subsequent Close A **subsequent close** (also called a later close or a rolling close) is any LP admission event after the fund's [first close](/fund-mechanics/first-close.md). The GP may hold multiple subsequent closes during the fundraising period — the LPA typically specifies a hard deadline by which all closes must complete. ## The Equalization Problem LPs who joined at first close have already had capital at work — they funded real investments and bear the time-value cost of that capital. A new LP joining six months later would gain an unfair advantage if they could invest alongside first-close LPs without compensating them for those six months of prior draws. **Equalization** solves this by charging the new LP a catch-up amount so all LPs are economically equal from the fund's start date. ## How Equalization Works For every capital call issued before the new LP's admission date, the new LP owes: 1. **Their pro-rata allocation** — their percentage of total commitments × the original call amount (the same share they would have paid had they been in the fund at the time). 2. **Interest on that allocation** — accrued from the call's due date to their admission date, at the rate specified in the LPA (typically 8–10% per annum, matching the preferred return). The sum is collected alongside the new LP's first regular capital call. For the full calculation methodology, see the [equalization methodology](/methodology/_equalization.md). ## Impact on Existing LPs When a new LP joins: * **Ownership percentages dilute** — the total fund size grows, so each prior LP owns a slightly smaller share. * **Existing LPs receive the interest component** — the interest the new LP pays on each prior call is redistributed to prior LPs, compensating them for having had capital deployed earlier. Gildi calculates both the dilution and the interest redistribution automatically when a new LP is added to a fund with existing capital call history. ## Admission Date Matters The new LP's **admission date** (the subsequent close date) determines: * Which prior calls are included in their equalization calculation. * Which future calls they participate in normally. * What fee terms apply (if different from first-close terms). Gildi records the admission date on the LP's commitment record. Changing it retroactively requires a corrective journal entry. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.gildi.io/fund-mechanics/subsequent-close.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.