# Unfunded Commitment

**Unfunded commitment** is the portion of an LP's total [commitment](/fund-mechanics/commitment.md) that has not yet been drawn via capital calls. It represents the GP's remaining right to call capital from that LP.

## Formula

```
Unfunded commitment = Total commitment − Paid-in capital
```

The unfunded balance decreases each time a capital call is settled. It starts equal to the full commitment amount on the LP's admission date and trends toward zero over the investment period.

## Impact of Recallable Distributions

In funds where the LPA permits **recallable distributions**, a distribution returned to LPs may reinstate a portion of the LP's unfunded commitment — the GP can re-call that capital within the window specified in the LPA (typically 12–24 months after the distribution date).

When a recall is processed in Gildi, the LP's unfunded balance increases by the recalled amount, and the GP can call that capital again in a future capital call. Whether recalls reinstate commitment is a per-fund setting in Gildi.

## LP Perspective: Contingent Liability

From an LP's perspective, unfunded commitment is a **contingent liability** on their balance sheet — cash that must be available on relatively short notice (ILPA recommends ≥10 business days' notice for capital calls). Institutional LPs typically maintain:

* A **liquidity buffer** — cash or near-cash reserves proportional to their aggregate unfunded across all fund commitments.
* An **uncalled capital credit line** — a bank facility that can be drawn to fund a capital call and repaid with the next distribution.

Gildi displays each LP's current unfunded commitment on their fund overview page, allowing them to plan liquidity across all their fund positions.

## GP Perspective: Draw Capacity

The GP tracks total unfunded commitment across all LPs as the fund's **remaining draw capacity** — the maximum it can still call before commitments are exhausted. This figure drives investment pacing decisions: a fund with low remaining unfunded must exit or recycle capital before making new investments.

## How Gildi Maintains the Balance

Unfunded balances are maintained in real time:

* **Decreases** when a capital call contribution is recorded as settled.
* **Increases** when a recallable distribution recall is processed.
* **No change** on unfunded when a capital call is issued (only on settlement).

The balance is always derived from the commitment record and the settled call history — it is not stored as a mutable field, preventing drift.


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