# How recallable distributions are tracked Not all capital once distributed stays distributed. The LPA defines which distributions are **recallable**: the GP may draw them back to fund a future portfolio investment, cure an over-distribution, or meet a fund expense. This creates a second category of capital beside the LP's unfunded commitment. ## Recallable vs. non-recallable distributions At distribution time, every distribution line is tagged one of: * **Recallable** — the GP retains the right to re-call this capital for the purposes and within the time window the LPA specifies (commonly, during the investment period, for investment-related purposes only). * **Non-recallable** — once paid, the GP cannot call it back. Return of capital beyond the investment period is usually non-recallable. The distinction is declared on the distribution notice at the time the distribution is issued, not retroactively. Gildi enforces this: an LP cannot reclassify a non-recallable distribution as recallable after it has been sent. ## The recallable running balance For each Limited Partner, Gildi maintains a **recallable balance** — the cumulative amount that the General Partner is still entitled to recall. Each Limited Partner's recallable balance equals the total recallable distributions paid to them, less all amounts recalled from them to date. This balance decrements each time a recall draws against it and may also expire per fund agreement time limits (e.g., "recallable only within 18 months of the original distribution date"). Gildi fires a scheduled expiry event when recall windows close. ## How a recall reduces the called amount When the General Partner issues a recall notice, the total amount to be recalled is split across Limited Partners using the same committed-capital-pro-rata allocation described in [the allocation methodology callout](/methodology/_allocation.md). Each Limited Partner's net new cash required equals their gross recall allocation less their available recallable balance, with a floor of zero — they never receive money back on a call. If a Limited Partner's recallable balance covers their entire pro-rata share, their **net new call is zero** — they are satisfying the recall from their previously distributed recallable capital, not from fresh cash. If their recallable balance is less than their pro-rata share, only the shortfall requires new cash. The recall notice itemizes both the gross allocation and the net new call for each LP. This matters for LP cash management and accounting: the LP recognises the offset against their distributed recallable balance and only needs to wire the net new amount. ## Effect on commitment bookkeeping The LPA governs whether a recalled distribution **reinstates unfunded commitment**. Gildi supports both regimes: * **Commitment reinstated** — the recalled amount is added back to the LP's unfunded commitment, restoring the fund's total callable capital. The LP's paid-in capital (which had been reduced when the distribution was originally made as a return of capital) is also restored. * **Commitment not reinstated** — the recalled capital is applied to fund the investment directly. Unfunded commitment remains unchanged. The regime is declared at fund creation and applies uniformly; mixed treatment within a single fund is not supported. ## Worked example A fund has three LPs. LP A holds a €300,000 recallable balance from a prior distribution. The GP now issues a €1,000,000 recall to fund a follow-on investment. Pro-rata recall allocation (25 / 37.5 / 37.5 % shares): | Limited Partner | Gross recall allocation | Recallable balance available | Net new cash required | | --------------- | ----------------------: | ---------------------------: | --------------------: | | Investor A | €250,000 | €300,000 | €0 | | Investor B | €375,000 | €0 | €375,000 | | Investor C | €375,000 | €0 | €375,000 | Investor A's recallable balance fully absorbs their pro-rata share (with €50,000 remaining in their balance for future recalls). Investor B and Investor C have no recallable balance and must wire the full €375,000 each. Total new cash collected: €750,000; total recalled from balances: €250,000; combined: €1,000,000. After the recall, Investor A's recallable balance is €300,000 − €250,000 = **€50,000**. ## Recall window expiry The fund's Limited Partnership Agreement typically defines a window (e.g., "no later than 18 months after the distribution date") after which the General Partner loses the right to recall. Gildi records an expiry timestamp on each recallable distribution and runs a nightly job that: 1. Identifies recallable balances whose window closes at midnight. 2. Marks those amounts as expired and removes them from each Limited Partner's recallable balance. 3. Emits an audit event so the General Partner can see which recall rights lapsed. No Limited Partner notification is required for expiry — this is a General Partner-side ledger event — but General Partners can export a report of expired recall rights from the fund's distribution history. ## What this **does not** cover * The allocation math for recall notices — same formula as standard calls; see [the allocation methodology callout](/methodology/_allocation.md). * The original distribution mechanics — how distributions are calculated, categorized (return of capital, preferred return, carried interest), and paid out. See [Distribution waterfall](https://github.com/manuelbenitez/gildi-monorepo/blob/docs-published/waterfall/waterfall.md) for an overview; full methodology will be covered in a forthcoming callout. * Limited Partner side-letter modifications to recall rights — e.g., a Limited Partner whose side letter restricts recall to investment purposes only. Gildi stores those restrictions but side-letter enforcement is currently manual (General Partner responsibility); automated side-letter MFN cascades are future work. ## Standards cited * **ILPA Model LPA §6.3.2** — definition of recallable distributions and the conditions under which recall rights lapse. ## Audit trail For every recall event, Gildi persists: * The distribution IDs being recalled and their original recallable amounts * Each LP's gross recall allocation and available recallable balance at the time of the recall * The net new cash amount due from each LP * The post-recall recallable balance for each LP * Whether unfunded commitment was reinstated and by how much * Any recall balance amounts that expired (nightly job events) The recall notice PDF renders the gross allocation, offset from recallable balance, and net new cash due so each LP can reconcile without contacting the GP. --- # 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. 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