LP Quarterly Tracking
How do LPs typically track a fund/deal performance that they're invested in?
It seems like even if you trust your GP 100%, deals can get complicated and it'd be prudent to verify distributions/carry calculations as they can get complicated and prone to mistakes. So how do LPs go about verifying the distributions throughout the hold period? Do they essentially just individually track capital accounts and recreate the waterfall the same way the GP does? Are there nuances that are important to note?
I know it's a pretty basic questions as I don't have experience working with LPs so I'd appreciate any info related to this. Thank you!
I'm coming at this from the GP perspective, but our LPs would always keep their own records to "double check" us when money was concerned. They had a copy of our model and their own internal model and would update it accordingly. It wasn't adversarial or anything either—we'd send them our preliminary figures and they'd either agree with them, ask questions, and/or point out what might be an error.
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