Subscription line (capital call facility)
Also called capital call facility, sub line, subscription credit facility.
A subscription line is a revolving credit facility, secured on the limited partners' uncalled commitments and the general partner's right to call them, that a fund draws to pay for investments and expenses before calling capital from LPs and repays from the later capital call.
Example
A fund buys a $10M position on 1 January 2026 using its subscription line at 7%. It calls the capital from LPs nine months later, on 1 October 2026: $10M plus $525,000 of interest (7% for three quarters of a year). The position sells for $20M on 1 January 2029.
Without the line, LPs put in $10M three years before receiving $20M: a 2.0x multiple and an IRR of about 26%. With the line, LPs put in $10.525M for 2.25 years: a 1.90x multiple and an IRR of about 33%. The reported IRR rose seven points while LPs received the same $20M and paid $525,000 more. The LPs' $20M did not change; the IRR did.
Confused with
NAV facility. Borrowing secured on the portfolio, used later in a fund's life. A subscription line is secured on money LPs have not yet paid in.
Capital call. The line delays the call; it does not replace it. Every draw is eventually repaid by calling LP commitments or from proceeds.
In practice
Most institutional LPs accept a line for cash management, bridging calls for a period measured in months, and object to one used for years to flatter IRR. ILPA asks GPs to report performance with and without the facility, and most LPAs now cap the facility as a share of commitments and set a maximum number of days a draw can stay outstanding. The venture capital fund definition under the Advisers Act also restricts borrowing in amount and duration, so a venture fund's counsel checks the facility against it.