Fundraising and closing

Final close

Also called Final closing.

Definition

A final close is the last closing at which a fund admits limited partners or accepts increased commitments. After it, total commitments are fixed, the fundraising period under the LPA ends, every LP's ownership percentage is final and the fee base no longer changes.

Updated October 9, 2026Checked against our editorial standards

Example

A fund first closed on 1 March 2026 with $18M, added $12M in September, and holds its final close on 28 February 2027 with a further $15M, for $45M against a $50M target and a $60M hard cap. The fund has already called 20% of commitments from the earlier investors, so the new LPs pay in 20% of $15M, or $3M, plus equalisation interest at the LPA rate, and the fund rebalances so every LP has funded the same percentage. Ownership is recomputed: the $10M anchor investor goes from 55.6% of $18M to 22.2% of $45M. The fee base becomes $45M, so 2% is $900,000 a year.

Confused with

Hard cap. The hard cap is the maximum the LPA allows the fund to raise. The final close is the event, and the fund may close below the cap.

End of the investment period. The investment period is the window for new investments, usually several years. The final close ends the window for new investors.

In practice

The LPA sets the fundraising period, commonly twelve to eighteen months from first close, extendable with advisory committee consent. After final close the administrator reruns every ownership percentage, refreshes each LP's unfunded commitment and reissues the LP register, and the MFN election process in the side letters usually starts.

Related terms

First closeA first close is the first date on which a fund's general partner accepts subscriptions and admits limited partners, at which point the partnership agreement takes effect, the fund can call capital and make investments, and the management fee usually begins to accrue.
EqualisationEqualisation is the adjustment made at each closing after the first that requires incoming limited partners to contribute their pro rata share of capital already called, plus an equalisation interest charge set in the LPA, with the proceeds paid or credited to the LPs who funded earlier, so that all LPs hold the same proportion of every investment regardless of when they joined.
Unfunded commitmentUnfunded commitment is the portion of a limited partner's capital commitment that the fund has not yet called, calculated as total commitment less contributions to date plus any distributions the LPA makes recallable, and represents the LP's remaining obligation to fund capital calls.
LPA (limited partnership agreement)An LPA, limited partnership agreement, is the contract between a fund's general partner and its limited partners that establishes the partnership and sets its terms: commitments and capital calls, management fee, carried interest and the distribution waterfall, term and extensions, investment restrictions, reporting obligations, key person and GP removal provisions.