PRIVATE EQUITY ACCOUNTING AND REPORTING SYSTEM AND METHOD

Description

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a continuation of U.S. application Ser. No. 12/330,414 (U.S. Pat. No. 8,117,096), filed Dec. 8, 2008, titled “PRIVATE EQUITY ACCOUNTING AND REPORTING SYSTEM AND METHOD,” naming inventor Jayne Thompson, and filed under Attorney Docket No. VCVI-2008003. The above-cited application is incorporated herein by reference in its entirety, for all purposes.

FIELD

The present disclosure relates to accounting and reporting specialized data for private equity funds, and more particularly for a method of configuring a general ledger to facilitate industry-specific reporting.

COPYRIGHT NOTICE

A portion of the disclosure of this patent document may contain material that is subject to copyright protection. The copyright owner has no objection to the facsimile reproduction by anyone of the patent document or patent disclosure as it appears in the U.S. Patent and Trademark Office patent file or records, but otherwise reserves all copyright rights whatsoever.

BACKGROUND

Private equity (“PE”) firms typically raise capital in a series of limited-life, closed-end funds. Each fund may typically be a group of separate legal investment entities, each of which is often structured as a limited partnership and formed to address the specific tax structuring needs of significant investor groups (such as tax exempt and foreign investors), to provide special economic arrangements to distinct investor classes, or to segregate investors by the Investment Company Act of 1940 definitions (i.e., Qualified Purchasers vs. Accredited Investors). During fundraising, investor entities (who are often limited partners) typically enter into a subscription agreement committing them to contribute a certain amount over the life of the investment entity in exchange for an agreed-upon share of the investment proceeds realized by the investment entity. As investments are made, the PE firm (who often serves as the general partner or “GP” of the investment entity) typically calls capital from the investor entities, who often participate in each of the investment entity's investments prorata based on relative subscriptions. In a typical fund, investments may be made in 20 to 50 investment targets (which may be operating companies or other investment pools). As investments are realized, proceeds are typically distributed in accordance with the terms of the partnership agreement. The PE firm may be compensated for its services through both a periodic management fee and a share of the investment entity's profits, known as the “carried interest.”

Real estate investment partnerships are considered “PE” firms as the term is used herein.

The nature and structure of PE funds typically requires specialized managerial or internal reporting relative to other enterprises, including the following.

Fund-to-date reporting: Since private equity is a long-term asset class, PE funds may report information on both a fiscal year and life-to-date (“FTD”) basis.

Specialized metrics reporting: PE firms may be benchmarked by a number of industry specific metrics such as dollar-weighted returns (referred to as “internal rate of return” or “IRR”), distributions to paid-in ratios, and value to paid-in ratios. IRR is often measured over various dimensions, such as sector, region, initial stage of investment, and investment partner (e.g., the PE firm's employee who is responsible for the investment).

Multi-level reporting: Since a PE fund is comprised of parallel legal entities, results may be reported at both the investment entity and the fund level. Furthermore, since the PE firm may raise capital over a series of funds, existing and potential investor entities may demand firm-level results (i.e., an aggregation of fund level results) when analyzing PE firm performance. The challenge of multi-level reporting depends on the number of entities in each fund and the number of funds raised over time by the PE firm.

Capital account reporting: Unlike an incorporated entity that simply issues entity-level financial reports to its investors, PE funds may issue “capital account” reports to individual investor entities. These reports are typically issued quarterly, and may include the individual partner's capital contributions, distributions, and share of operating activity, including realized and unrealized investment gains and losses. This may require detailed allocations of the investment partnership's operating activity to individual partners based on complex provisions of the limited partnership agreement known as the “waterfall.” Since each limited partnership agreement may be negotiated based on prevailing market terms at the time of fundraising and the desired economic terms with each investor class, each of the PE firm's investment entities may have different waterfall allocations. Likewise, classes of investor entities in a single investment entity may have different waterfall allocations.

Ad hoc reporting: A single PE fund may have 300 or more investor entities, including private and governmental pension plans, insurance companies, family trusts, and high net worth individuals. These investor entities may employ portfolio managers who allocate the investor entity's investments across various asset classes and to individual investment firms within each asset class. As these portfolio managers perform their individual analysis, they may make a number of ad hoc information requests to the PE firm. Accordingly, the PE firm may be asked to report the same information in various formats as prescribed by each investor entity.

“Family” or “Cross-fund” capital account reporting: An investor may have multiple legal investor entities through which it invests in the investment partnership. For example, a wealthy family may have a separate trust for each child. Each trust may be treated as a separate investor entity and may receive its own capital account report from the investment partnership. Such investors frequently ask for a “family” level report (i.e., an aggregation of the individual capital accounts) for monitoring purposes. Similarly, a single investor entity frequently commits to a number of the PE firm's funds over time and may request a consolidated capital account report that aggregates its capital account activity across several of the PE firm's investment partnerships.

Period specific reporting: Although many investment entities operate on a December 31 fiscal year, investor entities may operate on either a June 30 or September 30 fiscal year. Investor entities may therefore request capital account information for their fiscal year rather than the investment partnership's fiscal year. Accordingly, the PE firm may wish to report information for user-defined periods, which may cross the fiscal year of the investment partnership.

Tax reporting: Limited partnerships are typically tax transparent entities—i.e., the partnership is not responsible for paying tax on its taxable income. Instead, the partnership may file an informational return (Form 1065) and may issue a Schedule K−1 to each partner (i.e., investor entity) that details the partner's share of taxable activity to be reported on the partner's tax return. The PE firm may therefore maintain tax as well as financial capital accounts that adhere to Generally Accepted Accounting Principles (“GAAP”) by individual investor entity. Tax and GAAP capital accounts may differ because of book and tax differences, which are reported on Schedule M−1 of the Form 1065 (“M−1 differences”).

Using the common approach, a PE firm bookkeeper may need to consult only one general ledger account for the balance of an investment or one general ledger account for the capital account balance of an investor entity. However, using the common approach, it may be relatively difficult to produce many of the specialized reports described above. Accordingly, it is common for PE firms to keep at least one parallel set of books—one in general ledger software, and one in a set of spreadsheets. In such firms, the general ledger software is typically used for financial and regulatory reporting, while the spreadsheets are typically used for managerial and/or internal reporting.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagram illustrating an exemplary PE accounting/reporting device in accordance with one embodiment.

FIG. 2 is a diagram conceptually illustrating a series of exemplary equity investment transactions in accordance with one embodiment.

FIG. 3 is a key identifying several unique accounts for transactions illustrated in FIG. 2, in accordance with one embodiment.

FIG. 4 is a diagram illustrating a combination of segment identifiers that define a unique gain/loss account in accordance with one embodiment.

FIG. 5 is a diagram illustrating a combination of segment identifiers that define a unique investor entity (i.e., partner) capital account in accordance with one embodiment.

FIG. 6 is a diagram illustrating a generic segment identifier in accordance with one embodiment.

FIG. 7 is a flow diagram illustrating an account creation and entry recording routine in accordance with one embodiment.

FIG. 8 is a flow diagram illustrating an account identification routine in accordance with one embodiment.

FIG. 9 is a flow diagram illustrating a reporting routine in accordance with one embodiment.

FIG. 10 is an exemplary Partner Capital Account Summary report in accordance with one embodiment.

FIG. 11 is an exemplary Portfolio Summary report in accordance with one embodiment.

FIG. 12 is an exemplary Returns Analysis report in accordance with one embodiment.

FIG. 13 is an exemplary Gross IRR Analysis report in accordance with one embodiment.

FIG. 14 is an exemplary Transaction Detail report in accordance with one embodiment.

FIG. 15 is an exemplary Schedule of Portfolio Investments report in accordance with one embodiment.

FIG. 16 is an exemplary Portfolio Investments for Specified Period report in accordance with one embodiment.

FIG. 17 is an exemplary Realizations Report for Specified Period in accordance with one embodiment.

FIG. 18 is an exemplary Statement of Assets, Liabilities, and Partners' Capital report in accordance with one embodiment.

FIG. 19 is an exemplary Statement of Operations report in accordance with one embodiment.

FIG. 20 is an exemplary Statement of Cash Flows report in accordance with one embodiment.

FIG. 21 is an exemplary Partners Capital Account Activity report in accordance with one embodiment.

FIG. 22 is an exemplary Condensed Schedule of Portfolio Investments report in accordance with one embodiment.

FIG. 23 is an exemplary Treasury Status report in accordance with one embodiment.

FIG. 24 is an exemplary Deal Summary report, in accordance with one embodiment.

FIG. 25 is an exemplary Funding Detail report in accordance with one embodiment.

FIG. 26 is an exemplary Statement of Changes in Partners' Capital report in accordance with one embodiment.

FIG. 27 is an exemplary Statement of Operations Detail report in accordance with one embodiment.

FIG. 28 is an exemplary “Dashboard” report in accordance with one embodiment.

DESCRIPTION

Reference is now made in detail to the description of the embodiments as illustrated in the drawings. While embodiments are described in connection with the drawings and related descriptions, there is no intent to limit the scope to the embodiments disclosed herein. On the contrary, the intent is to cover all alternatives, modifications and equivalents. In alternate embodiments, additional devices, or combinations of illustrated devices, may be added to, or combined, without limiting the scope to the embodiments disclosed herein.

FIG. 1 illustrates several components of an exemplary PE accounting/reporting device 100. In other embodiments, a PE accounting/reporting device 100 may include many more components than those shown in FIG. 1. However, it is not necessary that all of these generally conventional components be shown in order to disclose an enabling embodiment. As shown in FIG. 1, the PE accounting/reporting device 100 includes an optional network interface 130 for connecting to remote devices. If present, the network interface 130 may be a network interface designed to support a local area network (LAN), wireless local area network (WLAN), personal area network (PAN), telephone network, powerline connection, serial bus, universal serial bus (USB) wireless connection, or the like. The optional network interface 130 includes the necessary circuitry, driver and/or transceiver for such a connection and is constructed for use with the appropriate protocols for such a connection.

The PE accounting/reporting device 100 also includes a processing unit 110, an optional display 140, and a memory 150, all interconnected along with the optional network interface 130 via a bus 120. Those of ordinary skill in the art and others will appreciate that the display 140 may not be necessary in all forms of computing devices and, accordingly, is an optional component. The memory 150 generally comprises random access memory (“RAM”), a read only memory (“ROM”), and a permanent mass storage device, such as a disk drive, flash RAM, or the like. The memory 150 stores the program code and/or data storage necessary for implementing a general ledger accounting system 160, a list of segment identifiers 165, account creation and entry recording routines 700, reporting routines 900, account identification routines 800, and a supplemental information data source 185. Additionally, the memory 150 stores an operating system 155.

These and similar software components may be loaded from a computer readable medium into memory 150 of the PE accounting/reporting device 100 using a drive mechanism (not shown) or network mechanism (not shown) associated with the computer readable medium, such as a floppy, tape, DVD/CD-ROM drive, flash RAM, or network interface card.

Although a conventional general-purpose computing device may be transformed via software into a PE accounting/reporting device 100 as described, a PE accounting/reporting device 100 may also be embodied on a great number of devices capable of recording and reporting accounting entries. For example, in alternate embodiments, a PE accounting/reporting device 100 may be embodied on a mobile phone, personal digital assistant, personal computer, or the like.

FIG. 2 is a diagram conceptually illustrating a series of exemplary equity transactions in accordance with one embodiment. One or more investment entities 210, 215 participate in a PE fund 205. In the illustrated scenario, investment entity A 210 provides an asset that the PE fund 205 used to fund an investment transaction 225A in a particular target (target A) 230 in exchange for which, the PE fund 205 obtains a number of shares of a particular equity security 235 issued by target A 230 in transaction 225B. Similarly, investment entity N 215 provides an asset 245 that is used to fund an investment transaction 225C in target A 230 and an investment transaction 225D in target B 265. In exchange, the PE fund 205 obtains equity securities 255 and debt securities 270 in transactions 225E and 225F, respectively.

Over the life of an investment, such as those illustrated in FIG. 2, there may be a number of additional transactions related to the initial investment. For example, a bridge loan may be converted to a preferred equity security. The preferred equity security may subsequently be converted to common stock of the issuer. Upon exit, the common stock may be exchanged for securities of the acquiror. A PE firm may wish to have a complete history of these transactions for monitoring and analyzing its portfolio. In addition, various transaction types may be processed differently for purposes of various financial and management reports. Accordingly, in one embodiment, each transaction type for a particular investment entity, target, and security may be recorded in a unique account.

FIG. 3 identifies several unique accounts that may be created and used to record transactions 225A-F. Transaction 225A-F are each members of a unique class of transactions that may be characterized as the intersection of several transaction “dimensions.” In an exemplary embodiment, there are four “dimensions” representing various transaction parameter classes, including the identity of the investment entity 305, the identity of the investment target 315, the type of security or asset received 320, and the type of transaction within an asset type 310. Thus, as illustrated in FIG. 3, transactions 225A-F may be characterized as six unique intersection points among dimensions 305-320. Put another way, each of transactions 225A-F may be characterized as a unique combination of several (in this case, four) transaction parameter classes 305-320. As discussed below, these and other combinations, similarly derived, may be used to create and identify a multiplicity of general ledger accounts, each used to record accounting entries associated with a particular combination of transaction parameters.

Accordingly, various embodiments, described in more detail below, may enable a PE firm to use the same general ledger accounts that are used for financial reporting to generate some or all of the above-described industry-specific managerial reports, including investment tracking (both invested dollars and units); portfolio statistics and metrics (including gross and net IRR calculations, as applicable) for the firm, fund, entity, or any pre-determined dimension such as sector or geography; individual or family capital account reporting (including capital call calculations and income/loss allocations) by entity or across funds; M−1 difference and tax capital account reporting; and management company reporting. Data rich reports may be generated for pre-determined periods (i.e., quarterly, fiscal year, or FTD) or flexible reporting periods crossing fiscal years.

Some general ledger accounting software may benefit from certain functionality in various report writer solutions, including SAP's XL Reporter (“XLR”), as distributed domestically by Solver, Inc. of Los Angeles, Calif. Such report writers may enable definition of various reports that may be able to draw specifically defined accounting entries from a particularly configured general ledger. Reports may be further presented and manipulated in appropriate software packages, e.g., a spreadsheet software package.

In other embodiments, more or fewer parameter classes may be present. In particular, in other embodiments, further transaction parameter classes may include the sector of the target, the identity of a PE firm employee or associate responsible for the transaction, an investment duration or “active thru” parameter, a publicly-held/privately-held parameter, and an identity of a PE firm partner who is responsible for the transaction. In various embodiments, such additional parameters may be implemented as user-defined fields associated with each general ledger account.

As illustrated in FIG. 4, the following four parameter classes may be used to create and identify gain/loss accounts in a general ledger: transaction type 405, investment entity 410, investment target 415, and security type 420.

As illustrated in FIG. 5, the following four parameter classes may be used to create and identify investor capital accounts in a general ledger: transaction type 405, investment entity 410, partner 515, and an optional partner transaction type 520.

In an exemplary embodiment, a transaction parameter class may have a list of unique identifiers to represent each member of the class. FIG. 6 illustrates an exemplary structure of a generic transaction parameter identifier 600, which includes a species identifier 605, an optional sub-species identifier 610, and a member identifier 615. In one embodiment, an identifier may comprise four or fewer alphanumeric characters. In some cases, an identifier may also lack a species identifier 605, in which case, an identifier would include only a member identifier 615.

Various transaction type classes may include species, sub-species, and members as listed in Tables 1-5, below. Since requirements of each installation may be different, the configuration details that follow are but one embodiment. They are representative of a typical installation, but users will modify the configuration to meet their specific needs.

In one embodiment, transaction type species may comprise the following:

• • Assets, see Table 1;
  • Liabilities, see Table 2;
  • Partners' Capital, see Table 3;
  • Income, Including Portfolio Gains and Losses, see Table 4; and
  • Expenses, see Table 5.

The list of transaction types and identifiers in Tables 1-5 is not exhaustive but is representative of the level of detail required for capturing the portfolio activity. Along with lists of representative transaction types, Tables 1-5 also list a set of exemplary four-digit transaction type identifiers, in accordance with one embodiment. In the exemplary embodiment, the first digit of the transaction type identifiers acts as a species identifier 605, the second digit as a sub-species identifier 610 (where appropriate), and the third and fourth digits as a member identifier 615.

TABLE 1
Member definitions for Asset Species (1XXX)

ID	Description	Definition
1000	Cash
1100	Capital calls receivable

12XX	Debt Investments Sub-species

1210	Invested - Debt	Cash fundings only
1211	Invested - Debt CR	Special cash adjustments to portfolio
	adjustments	company debt fundings. Used
		principally for final closing
		true-ups for reduction of
		investment.
1212	Invested - Debt DR	Special cash adjustments to portfolio
	adjustments	company debt fundings. Used
		principally for final closing
		true-ups for increase in investment.
1219	OID on funded debt	Contra to Main Segment
		1210 to reflect OID on funded
		debt. Use 1242 for OID on
		exchange debt.
1220	Capitalized interest - Debt	Stated interest capitalized as
		debt principal
1221	Periodic accreting interest	Periodic accretion of interest
1229	OID amortization	Accumulated amortization of
		OID (debit bal) - Use for OID
		amortization on funded debt only.
		See 1243 for OID amortization on
		exchange debt.
1231	Original Issue Discount	OID on funded (i.e., 121X)
		debt - Contra account
1232	OID Amortization	OID amortization on funded debt
1241	Debt received for equity	Debt received for equity of same
		issuer. This is the offset to 1341.
1242	OID on exchange debt	Contra to Main Segment
		1241 for OID on
		exchange (i.e., non-funded) debt
1243	OID amortization on	Accumulated amortization of
	exchange debt	OID (debit bal) -
		Use for OID amortization on
		exchange debt only.
1251	Bridge converted to debt	Bridge loan converted to another
		form of debt
1255	Other debt exchanges	Exchange of debt for debt
1260	Bridge converted to equity	Bridge (P&I) converted to equity
1261	Conv debt converted to	Other debt (P&I) converted to
	equity	equity
1268	Contributed debt	In-kind contribution of
		debt (See 1328)
1271	Debt security repayment	Cash pmt from issuer EXCLUDING
		Bridge loans
1272	Debt transfer	Cash from sale/transfer of debt
		to 3rd party
1276	Bridge repayment	Bridge loan repayment
1280	Unrecovered debt	Debt written off
1290	Unrealized adjustments on	Unrealized adjustments on
	debt	debt securities

13XX	Portfolio equity investments sub-species

1310	Invested - Equity	Cash fundings only
1311	Invested - CR Adjustments	Special cash adjustments to portfolio
		company equity fundings. Used
		principally for final closing true-
		ups for reduction of investment.
1312	Invested - DR Adjustments	Special cash adjustments to
		portfolio company equity fundings.
		Used principally for final
		closing true-ups for increase
		in investment.
1318	Invested - Other outside	Cash fundings for outside basis
	basis	other than blocker expenses.
		These amounts are excluded
		from Portfolio Company
		funded reports
1319	Invested - Blocker	Cash fundings for blocker
	expenses	expenses. These amounts are
		excluded from Portfolio
		Company funded reports
1320	Equity from bridge	Bridge loan conversions -
	conversions	Principal portion
1325	Converted from debt	Bridge loan conversions -
	interest	Capitalized interest
1328	In-kind contribution of debt	Equity for debt of 3rd
		party (See 1268)
1331	Capitalized dividends	Capitalized dividends
1341	Equity received for debt	Equity received in exchange for
		debt of issuer
1346	Equity rec'd for debt due to	Equity received for debt in merger
	merg
1351	Exchange of preferred - OI	Exchange preferred stock
		for another class of issuer's
		preferred stock
1352	Ex preferred for common -	Exchange preferred stock for
	OI	issuer's common stock
1353	Ex common for preferred -	Exchange common stock for
	OI	issuer's preferred stock
1354	Ex common for common -	Exchange common stock for another
	OI	class of issuer's common stock
1355	Exchange of preferred -	Exchange preferred stock for
	Merger	acquirer's preferred stock
1356	Ex preferred for common -	Exchange preferred stock for
	Merger	acquirer's common stock
1357	Ex common for preferred -	Exchange common stock for
	Merger	acquirer's preferred stock
1358	Ex common for common -	Exchange common stock for
	Merger	another class of
		acquirer's common stock
1359	Other equity exchanges	Equity exchanges not elsewhere
		classified
1361	Spin-out	Spin-out transactions
1362	Exercise stock rights	Includes exercise of option,
		warrant, etc.
1363	Convert convertible	Conversion of convertible
	securities	securities
1365	New securities - Basis	Reallocate basis due to new
	reallocation	securities issuance
1369	Internal entity restructuring	Transaction required for internal
		structuring only
1371	Equity returned	Cash from port co—i.e.,
		share buybacks
1372	Sale of equity	Cash from sale/transfer to 3rd party
1380	Unrecovered equity	Equity basis written off
1390	Unrealized Adj - Equity	Unrealized adjustments on
		equity securities

14XX	Feeder/GP Entity investments Sub-species

1410	Contributions	Contributions to downstream
	Feeder Entity-Outside	partnership
1419	Basis	Outside basis in feeder entity
1420	Net investment income/loss	Allocations from downstream
		partnership
1430	Net realized gain/loss	Allocations from downstream
		partnership
1450	Unrealized adjustments	Allocations from downstream
		partnership
1480	Distributions	Distributions from downstream
		partnership
1490	Syndication costs	Syndication costs allocated by
		downstream ptr

15XX	Unit Accounts for Ancillary Portfolio Data Sub-species

1510	Shares Expected	UNIT AC—Contractual
		shares (by series)
1511	Warrants Expected	UNIT AC—Contractual
		warrants (by series)
1520	Shares - Received	UNIT AC—Shares
		inventory (by series)
1521	Warrants - Received	UNIT AC—Warrants
		inventory (by series)
1540	CSE Conversion Rate	UNIT AC—CSE conversion
		rate by series
1580	Invest Contribution Called	UNIT AC—Investment
		contributions called
1599	Investment Commitments	UNIT AC—Commitments (by
		series) and reserves

16XX	Other Asset Accounts Sub-species

1610	Prepaid Insurance	Prepaid insurance
1620	Prepaid Bank Fee	Prepaid LOC fees, etc.
1650	Other Prepaids	Other prepaids

17XX	Other Receivables Sub-species

1710	Accrued Interest	Accrued interest receivable
	Receivable
1720	AR for Securities Sold	AR for securities sold
1721	Escrow Receivable	Escrowed cash proceeds receivable
1722	Note Receivable for	Note receivable re securities sold
	Securities Sold
1730	Accounts Receivable	Due from affiliates
1740	Due from Affiliates	Other Receivable

TABLE 2
Member definitions for Liabilities Species (2XXX)

ID	Description
2000	Accounts payable
2011	Due to affiliates
2015	Accrued liabilities
2020	Capital call payable
23XX	Notes payable sub-species
2310	Revolving note - Proceeds
2311	Revolving note - Re-payments
2312	Demand note - Proceeds
2313	Demand note - Re-payments
2700	Other liabilities

As illustrated in Table 3, below, Partners' Capital Species Identifiers may identify accounts used to capture partner capital account data, including subscriptions, contributions, distributions, transfers, and income/loss allocations, as well as remaining and fulfilled subscriptions. Design of the Partners' Capital species accounts and identifiers may be highly dependent on the terms of the PE firm's limited partnership agreements. If, for example, the partnership agreement provides for recycling of investment proceeds, a recallable distributions account may be required Likewise, distributions may be captured in the distributions sub-species (33xx), and the level of detail for capturing distribution information may depend on the PE firm's waterfall provisions.

TABLE 3
Member definitions for Partners' Capital Species (3XXX)

ID	Description
300X	Commitments sub-species
3001	Initial commitment
3002	Remaining commitment
3003	Fulfilled commitment
3004	Recyled distributions
3005	Recallable distributions
3100	Contributions
319X	Blocker corporation capital receipts sub-species
3190	Common Stock
3191	Additional Paid in Capital
3199	Contributions Breakdown
33XX	Distributions sub-species
3391	Return of capital from blocker
3410	Syndication costs
3500	Transfer of capital balance
38XX	Allocations sub-species
3810	Management fees
3811	Net investment income/loss
3830	Realized gains/losses
3850	Unrealized appreciation/depreciation
39XX	Beginning retained earnings sub-species
3910	Management fees
3911	Net investment income/loss
3930	Realized gains
3931	Realized losses
3950	Unrealized appreciation/depreciation
3999	Automated closing entry

TABLE 4
Member definitions for Income, Including Portfolio
Gains and Losses Species (4XXX)

ID	Description
41XX	Portfolio income sub-species
4110	Interest income - Bank
4112	Interest income - Portfolio
4130	Dividend income
4190	Net investment income (loss) from downstream
	partnerships
4200	Management fee income
45XX	Portfolio Gains & Losses sub-species
4511	Realized losses
4521	CASH Realized gains
4522	NON-CASH Realized gains
4550	Unrealized appreciation/depreciation for current period

TABLE 5
Member definitions for Partnership Expenses Species (7XXX)

ID	Description
7100	Management fees
72XX	Professional fees sub-species
7210	Legal fees
7220	Audit/tax fees
7280	Other professional fees
75XX	Interest expense sub-species
7510	Revolving note
7511	Demand note
7550	Other
78XX	Other expenses sub-species
7810	Printing
7820	Business license fees
7825	Franchise fees
7830	Insurance
7840	Bank charges
7850	Bank charges - Line of credit
7871	Annual meeting expenses - Meals
7872	Annual meeting expenses - Other
7890	Penalties

Although an expansive exemplary set of transaction type members, species, and identifiers is disclosed in Tables 1-5, in a minimal embodiment, as few as four sub-species of transaction types, each having one or more members, may be identified, including those listed in Table 6. Transaction type identifiers in the Equity Invested, Equity Return, and Portfolio Gains/Losses sub-species (e.g., 13XX and 45XX exemplary identifiers) may be used in a four part portfolio series account parameter combination 400. Transaction type identifiers in the Partners' Capital Allocations sub-species (e.g., exemplary identifier 38XX) may be used in a three or four part partner series account identifier combination 500.

TABLE 6
Minimal set of Transaction Type members and exemplary identifiers

ID	Description
131X	Equity Invested sub-species
1310	Invested - Equity
1318	Invested - Other outside basis
137X	Equity Return sub-species
1371	Equity returned
38XX	Partners' Capital Allocations sub-species
3811	Net investment income/loss
3830	Realized gains/losses
3850	Unrealized appreciation/depreciation
45XX	Portfolio Gains/Losses sub-species
4521	Other Realized gains/losses
4522	Non-Cash Realized gains
4550	Unrealized appreciation/depreciation for current period

In another embodiment, the minimal set of transaction types of Table 6 may be expanded to include some or all of those listed in Table 7, which may be used in a four part portfolio series account parameter combination 400.

TABLE 7
Additions to Minimal set of Transaction Types
and exemplary identifiers

ID	Description
1210	Invested - Debt
1276	Debt repayment
1720	AR for securities sold

In still other embodiments, various other subsets of the transaction type identifiers listed in Tables 1-7 may be used.

Investment Entity Identifiers

In accordance with one embodiment, Investment Entity Identifiers 410 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 8.

TABLE 8
Investment Entity Species and Exemplary Identifiers

	ID	Description
	A	Fund investment partnerships
	F	Feeder entities
	G	General partner entities
	H	General partner of the GP entities
	I	Intermediary entities, i.e., blocker entities
	S	Special purpose entities

In an exemplary embodiment, sub-species identifiers 610 are not used in Investment Entity Identifiers 410, and member identifiers 615 may comprise two alphanumeric characters. In one embodiment, member identifiers 615 assigned based on each entity's legal structure. Thus, in an exemplary embodiment, an investment entity may have a unique identifier such as “A01,” “A02,” “F01,” and the like.

Investment Target Identifiers

In accordance with one embodiment, Investment Target Identifiers 415 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 9.

TABLE 9
Investment Target Species and Exemplary Identifiers

	ID	Description
	C	targets directly invested in
	I	targets indirectly invested in (e.g., targets invested in
		through an intermediary or blocker corporation)
	S	targets invested in through a special purpose entity

In an exemplary embodiment, sub-species identifiers 610 are not used in Investment Target Identifiers 415, and member identifiers 615 may comprise three alphanumeric characters, unique to each target. In an exemplary embodiment, crossover investments (i.e., investments in a single portfolio company by multiple funds) use the same Investment Target Identifier 415 in both funds. Conversely, in the event of spin-outs, mergers and acquisitions, and other restructuring activities, a new Investment Target Identifier 415 may be assigned to the successor company.

In one embodiment, supplemental information may be used to provide a more descriptive name for some or all investment targets. For example, an investment target having an identifier such as “C001,” may be associated with supplemental information comprising a company name, e.g., A Big Deal, Inc. Such supplemental information may be used, for example, for printing on reports. As with other types of supplemental information, company name supplemental information may be maintained in a spreadsheet file, in an external database, in a text file, on a network accessible data store, or in another electronic data source.

Security Type Identifiers

In one embodiment, Security Type Identifiers 420 may be constructed using exemplary species (and exemplary species identifiers) listed in Table 10.

TABLE 10
Security Type Species and exemplary identifiers

	ID	Species
	A	Notes
	C	Preferred Stock
	D	LLC - Preferred interest
	G	Common Stock
	H	LLC - Common interest
	J	Options - Preferred (Stock or LLC)
	K	Options - Common (Stock or LLC)
	O	Warrants - Preferred Stock
	P	Warrants - Common Stock
	T	Escrow - Preferred Stock
	U	Escrow - Preferred LLC Interest
	V	Escrow - Common Stock
	W	Escrow - Common LLC Interest

In an exemplary embodiment, Sub-Species Identifiers 610 are not used in Security Type Identifiers 420, and member identifiers 615 may comprise three alphanumeric characters. In one embodiment, member identifiers 615 assigned to ensure that securities for a target sort in the proper order on a schedule of investments. Thus, in an exemplary embodiment, a security may have a unique identifier such as “C0A0” (e.g., Series A Preferred Stock); “C0A1” (e.g., Series A-1 Preferred Stock); “C1A0” (e.g., Series 1-A Preferred Stock); and the like. In one embodiment, an identifier such as “RRRR” may be used to denote reserves if a PE firm elects to track reserves.

In one embodiment, supplemental information may be used to provide a more descriptive name for some or all security types of some or all investment targets. For example, an security type having an identifier such as “C0A0,” may be associated with supplemental information comprising a descriptive security name, e.g., “Series A redeemable participating preferred stock.” Such supplemental information may be used, for example, for printing on reports. As with other types of supplemental information, security name supplemental information may be maintained in a spreadsheet file, in an external database, in a text file, on a network accessible data store, in another electronic data source, or the like.

In some embodiments, descriptive security name supplemental information may be cross-indexed by investment target. For example when reporting on security identifier “C0A0” as issued by investment target identifier “C001,” the descriptive security name may be identified as “Series A redeemable participating preferred stock.” However, when reporting on security identifier “C0A0” as issued by investment target identifier “C002,” the descriptive security name may be identified as “8% Series A participating preferred stock.”

Partner Identifiers

In accordance with one embodiment, Partner Identifiers 515 may be constructed using the exemplary species (and exemplary species identifier) in Table 11.

TABLE 11
Partner Species and Exemplary Identifier

	ID	Species
	PG	General Partner investor entities
	P1-P9	Limited Partner investor entities

In other embodiments, one or more sub-species identifiers 610 may be used to distinguish General Partner entities from limited partner entities. In an exemplary embodiment, member identifiers 615 may comprise two alphanumeric characters.

In one embodiment, the same field may be used for both Investment Target Identifiers 415 and Partner Identifiers 515, in which case, Investment Target Species Identifiers (such as those listed in Table 9) may be chosen to be distinct from Partner Species Identifiers (such as those listed in Table 11).

In one embodiment, supplemental information may be used to provide a more descriptive name (e.g., “ABC Pension Plan”) for some or all partners in a manner similar to that described above for other types of supplemental information.

Partner Transaction Type Identifier

In various embodiments, Partner Transaction Type Identifier 520 may optionally be used to capture information relevant to a particular investment entity's investment (or partnership) agreement. For example, if the limited partnership agreement provides for deemed distributions, Partner Transaction Type Identifier 520 may use species identifiers to distinguish between cash and deemed distributions. Likewise, a species identifier may be used when the investment agreement provides for “cashless” contributions by the GP. An exemplary list of Partner Transaction Type Identifiers 520 is provided in Table 12.

TABLE 12
Exemplary Partner Transaction Identifiers

00CC	Cash contribution or distribution
00DD	Deemed cash contribution or distribution
00IE	Interest equivalent contributions (due to multiple closings)
00OF	Contra (offset) to adjust for timing of
	contributions (due to multiple closings)
00SS	Stock distribution
00ZY	GP deemed offset contra
00ZZ	GP management fee offset
00CI	Carried interest (to capture GP's carried interest allocations)
TRCC	Transfer (to transfer contribution activity)
TRIE	Transfer (to transfer interest equivalent contribution activity)
TRAN	Transfer (to transfer other elements of capital account activity)
INKD	In-kind contributions (to transfer across entities)

Other Transaction Parameter Classes

In various embodiments, additional transaction parameter classes may include some or all of the following:

• • Associate Identity: An Associate Identity transaction parameter class may enable a PE firm to filter certain investment reports for a subset of the portfolio assigned to a specific associate (i.e., PE firm employee responsible for the investment).
  • Active Thru Date: An Active Thru Date transaction parameter class may be used to exclude information on inactive accounts. An exemplary identifier convention is YYYYMMDD.
  • Status: A Status transaction parameter class may be used to segregate publicly-traded and privately-held investments.
  • Partner: The Partner transaction parameter class may enable a PE firm to filter transactions by lead partner.

FIG. 7 is a flow diagram illustrating an account creation and entry recording routine 700 in accordance with one embodiment. At block 705, routine 700 obtains an indication of an investment transaction. In one embodiment, the indicated investment transaction includes transaction parameters including at least an identity of the investment entity 305, an identity of the investment target 315, a type of the security involved in the transaction 320, and a type of the transaction 310. Using the transaction parameters, subroutine 800, illustrated in FIG. 8 and discussed below, identifies a unique account for transactions with the indicated combination of transaction parameters. In decision block 730, routine 700 determines whether the uniquely identified account already exists. If the uniquely identified account does exist (because, e.g., a previous transaction had the same combination of transaction parameters as the indicated transaction), then in block 740, an accounting entry for the indicated investment transaction is recorded in the uniquely identified account.

If in block 730, the uniquely identified account is determined to not exist (because, e.g., the indicated transaction is the first to have the particular combination of transaction parameters), then in block 735, the uniquely identified account is created using the indicated combination of transaction parameters. After the uniquely identified account is created, in block 740, an accounting entry for the indicated investment transaction is recorded in the uniquely identified account. The routine 700 ends at block 799.

FIG. 8 is a flow diagram illustrating an account identification subroutine 800 in accordance with one embodiment. The subroutine 800 begins in block 805, in which a plurality of transaction parameters is obtained, typically from a calling routine. In block 810, an transaction type identifier 405 is selected from a transaction type identifier list. In an exemplary embodiment, the selected transaction type identifier 405 is structured as discussed above in Tables 1-5 and associated text. Similarly, in block 815, an investment entity identifier 410 is selected from an investment entity identifier list. In an exemplary embodiment, the selected investment entity identifier 410 is structured as discussed above in Table 8 and associated text.

In decision block 820, subroutine 800 determines whether the selected transaction type identifier 405 is within the Partners' Capital species, as discussed above in reference to Table 3. If the selected transaction type identifier 405 is within the Partners' Capital species, then the subroutine 800 needs to select identifiers for a Partners' Capital identifier combination 500, as illustrated in FIG. 5. In block 835, a partner identifier 515 is selected from a partner identifier list. In an exemplary embodiment, the selected partner identifier 515 is structured as discussed above in Table 11 and associated text. In block 840, a partner transaction type identifier 520 is optionally selected from a partner transaction type identifier list. In an exemplary embodiment, the selected partner transaction type identifier 520 is structured as discussed above in Table 12 and associated text.

If in decision block 820, the selected transaction type identifier 405 is determined to be outside the Partners' Capital species, then the subroutine 800 needs to select identifiers for a Portfolio Series identifier combination 400, as illustrated in FIG. 4. In block 825, an investment target identifier 415 is selected from an investment target identifier list. In an exemplary embodiment, the selected investment target identifier 415 is structured as discussed above in Table 9 and associated text. In block 830, a security type identifier 420 is selected from a security type identifier list. In an exemplary embodiment, the selected security type identifier 420 is structured as discussed above in Table 10 and associated text.

In decision block 845, subroutine 800 determines whether there are transaction parameters other than those discussed above. If so, subroutine 800 loops from beginning block 855 to ending block 865, selecting other identifiers in block 860 from other identifier lists, as appropriate.

In block 850, the selected identifiers 405-10 and 415-20 or 515-20 (and other identifiers, if other transaction parameters were determined in block 845) are combined into a unique account combination 400 or 500. The subroutine 800 ends in block 899, returning the combined unique account combination 400 or 500.

Typically, the various identifier lists discussed above in reference to FIG. 8 are stored in one or more electronic data sources accessible by the subroutine 800, such as, in various embodiments, a database, spreadsheet, text file, binary file, network server, and the like.

Reporting

In various embodiments, general ledgers may have a great number of accounts, and transactions related to a particular investment may be split up among several accounts. As such, it may be desirable to utilize a reporting tool capable of “rolling-up” accounting entries in various accounts to obtain data related to various reporting metrics.

FIG. 9 is a flow diagram illustrating a reporting routine 900 in accordance with one embodiment. The reporting routine 900 begins in block 905, in which it receives a reporting indication. In an exemplary embodiment, the reporting indication may include one of the reports listed in Appendix A and FIGS. 10-28, although in various embodiments, more or fewer reporting indications may be supported. In an exemplary embodiment, the reporting indication may also include one or more transaction parameters, including a particular investment target, investment entity, security type, partner, and/or partner transaction type.

Various reports utilize accounting entries from one or more accounts, selected according to various predetermined criteria. In step 910, reporting routine 900 determines one or more reporting components necessary to generate the indicated report. As used herein, the term “reporting component” refers to a numerical figure that may be derived from accounting entries in accounts identified by one or more unique combinations of transaction parameters. For example, in step 905, the reporting routine 900 may obtain an indication to generate an Internal Rate of Return (IRR) Report for a particular investment entity and a particular investment target, the indicated IRR Report having the following lines:

• • Cash investments (excluding blocker expense fundings), net of bridge loan proceeds;
  • Cash proceeds received (excluding bridge loan proceeds);
  • Proceeds receivable; and
  • Remaining fair value.

Having received an IRR Report indication, in step 910, reporting routine 900 may determine that each line requires one or more reporting components. For example, the “Cash investments” line may require four reporting components, comprising accounts having the following transaction types: Equity investments (e.g., transaction type identifier 1310); Debt Investments (e.g. transaction type identifier 1210); Outside basis (e.g. transaction type identifier 1318); and Bridge loan proceeds (e.g. transaction type identifier 127X).

Continuing with the same example, the “Remaining fair value” line may require other reporting components, comprising accounts having the following transaction types: Debt Investments (12XX)+Equity Investments (13XX).

Various other reporting lines may similarly require various other predetermined reporting components. Once all required reporting components have been determined in block 910, reporting routine 900 iterates over all reporting components from beginning block 915 to ending block 935. In block 800, the account identification subroutine 800, illustrated in FIG. 8 and discussed above, is run to identify the account associated with the indicated transaction parameters and the current reporting component. In block 920, reporting routine 900 obtains all accounting entries from the identified account. In block 925, reporting routine 900 optionally processes the accounting entries obtained in block 920. For example, if required by the indicated report, the accounting entries may be sub-totaled by date. Similarly, if required by the indicated report, in block 930, supplemental information associated with one or more of the transaction parameters currently being processed. For example, reporting routine 900 may obtain a legal name of an investment entity or target, or a descriptive name of a security. The reporting component processing loop ends at block 935, and if there are other reporting components to process, reporting routine iterates back to block 915 to process the next reporting component.

Once all reporting components have been processed, reporting routine 900 proceeds to block 940, where the various accounting entries obtained and/or processed in iterative blocks 920 and/or 925 are further processed. For example, to generate a Cash investments line for an IRR Report, a sum of accounting entries from the Bridge loan proceeds component may be subtracted from a sum of accounting entries from the Equity investments component, from the Debt Investments component, and from the Outside basis component.

In block 945, the obtained and processed components are combined with supplemental information obtained (if any), and the report formatted for display on an output device, such as a display, monitor, printer, or electronic storage device. Reporting routine ends at block 999.

Exemplary Reports

FIG. 10 is an exemplary Partner Capital Account Summary report 1000 in accordance with one embodiment. Data is shown reported on a quarterly 1005A-D, annual 1010, and FTD 1015 basis. In various embodiments, a Partner Capital Account Summary report may be run for any 12 month period for a single investment entity or a “family” of investment entities.

FIG. 11 is an exemplary Portfolio Summary report 1100 in accordance with one embodiment. In various embodiments, a Portfolio Summary report 1100 may include additional information such as current ownership, lead partner, geographic region, and/or public/private status. In some embodiments, a Portfolio Summary report 1100 can be designed to run for subsets of the portfolio (such as lead partner).

FIG. 12 is an exemplary Returns Analysis report 1200 in accordance with one embodiment. The illustrated report 1200 shows a gross Internal Rate of Return (“IRR”) for the investment entity, as well as a Net IRR 1210 for only limited partner investor entities, and a Net IRR 1215 for all investor entities.

FIG. 13 is an exemplary Gross IRR Analysis report 1300 in accordance with one embodiment. In some embodiments, IRR by investment target may also be presented. In various embodiments, a Gross IRR Analysis report 1300 may be run for subsets of an investment portfolio, such as by partner, sector, or region.

FIG. 14 is an exemplary Transaction Detail report 1400 in accordance with one embodiment. In some embodiments, a Transaction Detail report 1400 may be generated for various subsets, including for a single deal, for a single investment target, for a subset of the fund's investment portfolio such as a single investment entity, for all investment targets, for a specific time period, and/or fund-to-date.

FIG. 15 is an exemplary Schedule of Portfolio Investments report 1500 in accordance with one embodiment. In various embodiments, a Schedule of Portfolio Investments report 1500 may be run at the fund or investment entity level.

FIG. 16 is an exemplary Portfolio Investments for Specified Period report 1600 in accordance with one embodiment. In various embodiments, a Portfolio Investments for Specified Period report 1600 may be generated for any user-defined period over the entire life of the fund.

FIG. 17 is an exemplary Realizations report 1700 in accordance with one embodiment.

FIG. 18 is an exemplary Statement of Assets, Liabilities, and Partners' Capital report 1800 in accordance with one embodiment.

FIG. 19 is an exemplary Statement of Operations report 1900 in accordance with one embodiment.

FIG. 20 is an exemplary Statement of Cash Flows report 2000 in accordance with one embodiment.

FIG. 21 is an exemplary Partners Capital Account Activity report 2100 in accordance with one embodiment.

FIG. 22 is an exemplary Condensed Schedule of Portfolio Investments report 2200 in accordance with one embodiment.

FIG. 23 is an exemplary Treasury Status report 2300 in accordance with one embodiment.

FIG. 24 is an exemplary Deal Summary report 2400, in accordance with one embodiment, showing fund totals with details by various investment entities 2505A-C. In various embodiments, a Deal Summary report 2400 may also be generated for a user-defined period.

FIG. 25 is an exemplary Funding Detail report 2500 in accordance with one embodiment Like Transaction Detail report 1400, in various embodiments, a Funding Detail report 2500 may be generated for a subset of the investment portfolio or a user-defined period.

FIG. 26 is an exemplary Statement of Changes in Partners' Capital report 2600 in accordance with one embodiment.

FIG. 27 is an exemplary Statement of Operations Detail report 2700 in accordance with one embodiment. In various embodiments, a Statement of Operations Detail report 2700 may be generated on a quarterly, fiscal year, or fund-to-date basis.

FIG. 28 is an exemplary “Dashboard” report 2800, which summarizes desired information in accordance with one embodiment.

Appendices

An exemplary listing of report definitions is included as Appendix A. Appendix B provides a set of illustrative accounting entries using Gain/Loss account identifier combinations. Appendix C provides a set of illustrative accounting entries using Entity (i.e., Partner) Capital account identifier combinations.

Although specific embodiments have been illustrated and described herein, it will be appreciated by those of ordinary skill in the art that a whole variety of alternate and/or equivalent implementations may be substituted for the specific embodiments shown and described without departing from the scope of the present invention. This application is intended to cover any adaptations or variations of the embodiments discussed herein.

APPENDIX A

© 2006, Jayne Thompson

VC View Report Descriptions

Portfolio Analysis

• • Gross IRR—Details of calculation of portfolio-level (“gross”) IRR. Includes IRR calculations by individual investment and the ability to expand cash flow detail by investment. May be run using either an actual date or mid-month convention for cashflows.
  • Net IRR—All Partners—Details of calculation of Net IRR to all Partners (including the GP). Includes the ability to expand contributions and distributions details by date. May be run using either an actual date or mid-month convention for cashflows. The results will not be valid for periods after the most recent quarterly closing.
  • Net IRR—Limited Partners Only—Details of calculation of Net IRR to Limited Partners only. Includes the ability to expand contributions and distributions details by date. May be run using either an actual date or mid-month convention for cashflows. The results will not be valid for periods after the most recent quarterly closing.
  • Weekly Dashboard—Snapshot of portfolio, including commitments, investments and reserves by sector; recent portfolio transactions; commitment and investment information on five largest fund commitments; and cash/LOC availability.
  • Fund Total Value Rollforward—Displays by portfolio company the total value at beginning of quarter, amounts invested during the quarter, the net increase (decrease) from operating activities, and total value at the end of the quarter.
  • Fund Fair Value Rollforward—Displays by portfolio company the unrealized value at the beginning of quarter, the categories of transactions affecting remaining fair value (e.g., investment purchases or realizations, unrealized adjustments, and other income related adjustments), and unrealized value at the end of the quarter.
  • Lead Ptr IRR—Details of calculation of portfolio-level (“gross”) IRR for selected “lead” partner. Includes the ability to expand cash flow detail by investment. Also includes summary of amounts invested by sector and year.
  • Ptr IRR—Details of calculation of portfolio-level (“gross”) IRR for selected “assigned” partner. Includes the ability to expand cash flow detail by investment. Also includes summary of amounts invested by sector and year.
  • (Sector) IRR—Details of calculation of portfolio-level (“gross”) IRR for selected sector. Includes the ability to expand cash flow detail by investment. Also includes summary of amounts invested by year.
  • IRR by Sector—Details of calculation of portfolio metrics by sector, including IRR.
  • IRR by Partner—Details of calculation of portfolio metrics by lead partner, including IRR.

Financial Statements and Supporting Schedules

Allocations Worksheets

• • Allocations Worksheet—Provides the data for the quarterly allocations calculations and upload to Dynamics GL.
  • 8/20% Pref Return—Calculates the 8 or 20 percent (as applicable) preferred return as required for quarter allocations.

Fund Entity Financial Statements Report Package**

• • Balance Sheet—Statement of Assets, Liabilities and Partners' Capital.
  • Statement of Operations—Statement of Operations—Quarter and YTD.
  • Statement of Partner Capital—Statement of Changes in Net Assets—Quarter and YTD.
  • Statement of Cash Flows—Statement of Cash Flows—Quarter and YTD.
  • Portfolio Investments—Schedule of Portfolio Investments.
  • Capital Accounts—Individual Capital Accounts—Quarter, YTD and FTD.

Supplemental Financial Reports

• • Fund Capital Summary—Side-by-side Statement of Changes in Partners' Capital for fund entities.
  • Condensed Port Sch—Summaries by a) Category, b) Sector, and c) Security Type for selected fund entity for inclusion in audited statements.
  • Operations Detail QTR—Summarizes Investment Income, Unrealized Adjustments, and Realized Gain/Loss by portfolio company for user selected three month period.
  • Operations Detail YTD—Summarizes Investment Income, Unrealized Adjustments, and Realized Gain/Loss by portfolio company through user selected month end for the current fiscal year.

Portfolio Monitoring

Activity by Associate—Detail of transactions (dollars and shares) by Portfolio Company for user-selected Columbia Associate and thru user-selected date. Includes capitalized interest but does not include blocker fundings.

• • Certificate Inventory—Detail of stock certificates expected (per the closing documents) and received as certificated shares. Use as a tickler report to identify certificates for follow-up.
  • Deal Funding Activity—Detail of transactions (dollars and shares) by user-selected “deal” thru user-selected date. Includes capitalized interest but does not include blocker fundings. See Deal Trans Detail report for all activity. A “deal” may include multiple portfolio companies.
  • Deal Trans Detail—Detail of all transactional activity for a “deal”, including amounts funded to related companies, blocker fundings, capitalized interest, OID amortization, basis returned, and basis written off. Does not include shares (see Deal Funding Activity report). A “deal” may include multiple portfolio companies.
  • Fund Portfolio—Consolidated schedule of Portfolio Investments for Columbia IV as of user-selected date.
  • FY Investment by Quarter—Details of amounts invested (funded only) by entity subtotaled by quarter for the current fiscal year.
  • Investment by Quarter—Details of amounts invested (funded only) by entity for user-defined three month period.
  • Investment by Sector—Amount invested (funded only) by company by sector and category (Technology v. Services) through user-selected period.
  • Period Invested—Details of amounts invested (funded only) by portfolio company and security for user-defined period. Includes monthly subtotals.
  • Period Invested by Co—Details of amounts invested (funded only) subtotaled by portfolio company for user-defined period.
  • Period Realized—Details proceeds received, proceeds receivable, cost relieved and realized gain or loss by portfolio company for user-defined reporting period.
  • Portfolio Co Trans Detail—Detail of remaining basis for user-selected portfolio company, including amounts funded to company, blocker fundings, capitalized interest, OID amortization, basis returned, and basis written off. Does not include shares (see Portfolio Company Detail report).
  • Portfolio by Category—Summary of amount invested (funded only) by each fund entity in each portfolio company grouped by category (services v. technology) through user-selected period.
  • Portfolio by Transaction—Amount invested (funded only) by security by transaction date through user-selected period end. Includes original investment amounts only; does not include exchanges.
  • Portfolio Company Detail—Detail of transactions (dollars and shares) for a user-selected single portfolio company grouped by security. Includes funded amounts only excluding blocker fundings. Does not include other items affecting basis such as capitalized interest. See Portfolio Co Trans Detail report for all activity affecting basis.
  • Valuation JE—Worksheet for calculation of valuation adjustments by security and fund entity. Includes journal entry for upload.

Commitments Reports (if applicable)

• • Entity Commitments—Detail of amounts funded and committed by portfolio company for selected fund entity. Used for footnote disclosure in annual audited statements.
  • Fund Commitments—Detail of amounts funded, committed and reserved by sector and portfolio company.

Investment Transactions Report Package**

• • Portfolio Summary—Summary of amount invested (i.e., funded only) by portfolio company by fund entity. Includes both direct and indirect investments. Does not include blocker fundings.
  • Portfolio Investments at Cost—Detail of securities purchased by fund entity (including capitalization investment income). Includes both direct and indirect investments. Includes original investments purchases only; does not reflect exchanges.
  • Trans Detail—Detail of all transactions affecting remaining basis for all companies in the portfolio. Includes both direct and indirect investments by fund entity. A summary by type of transactional activity (i.e., funded amounts, capitalized interest, OID amortization, basis recovered, and basis written off) appears at the end of the report. Does not include shares; see Fund Detail report for this information.
  • FTD Realizations—Detail of proceeds realized, proceeds receivable, basis relieved, and realized gain/loss by portfolio company by transaction date.
  • Fund Detail—Detail of transactions (dollars and shares) for all companies in the portfolio. Includes both direct and indirect investments by fund entity. Includes funded cost and capitalized interest and reflects exchanges but does not include other basis adjustments. See Trans Detail for complete basis information.
  • Direct Detail—Detail of transactions (dollars and shares) for all companies in the portfolio by direct investing entity. Includes funded cost and capitalized interest and reflects exchanges but does not include other basis adjustments.
  • Employee Investment Entity Summary—Detail of amounts funded by portfolio company and security for each employee investor. Grand total ties to employee investment entity total on Portfolio Summary report.
  • Blocker Funding—Detail of blocker fundings by blocker corporation (with notation of security to which the blocker funding is appended for financial reporting purposes).

Partners' Capital

Capital Account Reports

• • Capital AC—Individual—Individual capital account for user-selected partner and twelve month reporting period (must end on quarter).
  • Capital Call AR—Unpaid capital calls by entity.

Capital Call Worksheets

• • GP Cont by Entity by Date—Summarizes total contributions (including cashless contributions but excluding the adjustment for no self-charged management fee) by the General Partner by entity by transaction date. Use this report to calculate the amount to call from the General Partner entity.
  • Management Fees—Calculates quarterly management fees, net of deemed contribution offsets.
  • Capital Call—Calculates individual capital call amounts for fund partnership (and the offshore feeder entity). User inputs are i) Investment amount, ii) number of days in quarter for management fee calculation, iii) Expense amount, iv) offshore feeder expense amount, v) call date and vi) due date.

Entity Level Partners' Capital Reports

• • Capital AC—Entity—Entity-level capital account for user-selected entity and 12-month reporting period (must end on quarter).
  • Capital AC—Fund—Fund-level capital account for user-selected 12-month reporting period (must end on quarter).
  • Cash Contributions by Entity by Date—Total cash contributions by entity by transaction date. Does not include interest equivalent contributions.
  • Contributions by Entity by Date—“Contributions” as defined in limited partnership agreement by entity by transaction date. Includes cashless GP contribution and GP management fee contribution. Does not include interest equivalent contributions.
  • Distributions by Entity by Date—Distributions by entity by transaction date.

Partners' Capital Report Package**

• • Entity Summary—Summary of capital account activity by entity, including offsets for no self-charged management fee and cashless contributions by the GP.
  • Partner Capital Summary—Detail by partner of subscriptions, remaining subscriptions, and FTD contributions and distributions.
  • Subs by Closing—Detail of Subscriptions by closing date.
  • Contributions Detail—Detail of “Contributions” (as defined in limited partnership agreement) by partner and due date for each entity.
  • Cash Contributions Detail—Detail of cash contributions by partner and due date for each entity. Does not include interest equivalent contributions.
  • Interest Equivalent Contributions—Detail of interest equivalent contributions for LPs admitted after initial fund closing.
  • GP Deemed Detail—Detail of GP's deemed (“cashless”) contribution by call date.

Treasury Reports

• • Debt Cov—Calculates financial ratio covenants for credit agreement.
  • Treasury Status—Daily treasury status report including cash, LOC, receivables and payables balances.

** “Report packages” are generated as multiple spreadsheets in a single workbook. Any report definition may be grouped with any other report definition(s) to create a report package. The report packages designated above are recommended as a minimum.

APPENDIX B

© 2006, Jayne Thompson

Example Accounting Entries

	Main	Entity	ID	Type
	Segment	Segment	Segment	Segment	DR	CR
Example assumptions:

1.	Two fund investing entities:
	Qualified Purchaser Entity (90% of commitments)		A01
	Offshore Entity (10% of commitments)		A02	E20F
2.	Portfolio company
	ABC, LLC
	For direct investments			CABC
	For indirect investments			IABC
3.	Blocker corporation for offshore fund		I01
4.	Securities acquired
	Series A preferred stock				C0A0
	Convertible notes				A001
5.	Securities received in exchance
	Common stock				G000
	Sample entries:
A.	Acquire 100,000 shares of Series A preferred stock for $1M
	(i.e., $10 per share)
	Invested - equity (by QP Entity)	1310	A01	CABC	C0A0	900,000
	Invested - equity (by Offshore Entity)	1310	A02	IABC	C0A0	100,000
	Invested - equity (by Blocker Corp)	1310	I01	CABC	C0A0	100,000
	Cash (QP Entity)	1000	A01	0000	0000		900,000
	Cash (Offshore Entity)	1000	A02	0000	0000		100,000
	Contributed Capital in Blocker Corp	3191	I01	E20F	0000		100,000
	Shares expected (by QP Entity)	1510	A01	CABC	C0A0	90,000
	Shares expected (by Offshore Entity)	1510	A02	IABC	C0A0	10,000
	Shares expected (by Blocker Corp)	1510	I01	CABC	C0A0	10,000

** Since Shares expected (and shares received below) are unit (rather than posting) accounts, these

entries are one-sided.

B.	Receive stock certificates for above transaction
	Shares received (by QP Entity)	1520	A01	CABC	C0A0	90,000
	Shares received (by Offshore Entity)	1520	A02	IABC	C0A0	10,000
	Shares received (by Blocker Corp)	1520	I01	CABC	C0A0	10,000
C.	Acquire $500,000 of 10% convertible notes
	Invested - debt (by QP Entity)	1210	A01	CABC	A001	450,000
	Invested - debt (by Offshore Entity)	1210	A02	IABC	A001	50,000
	Invested - debt (by Blocker Corp)	1210	I01	CABC	A001	50,000
	Cash (QP Entity)	1000	A01	0000	0000		450,000
	Cash (Offshore Entity)	1000	A02	0000	0000		50,000
	Contributed Capital (Blocker Corp)	3191	I01	E20F	0000		50,000
D.	Record first year of interest on notes
	Accrued interest receivable (QP Entity)	1710	A01	CABC	A001	45,000
	Accrued interest receivable (Blocker Corp)	1710	I01	CABC	A001	5,000
	Portfolio interest income (QP Entity)	4112	A01	CABC	A001		45,000
	Portfolio interest income (Blocker Corp)	4112	I01	CABC	A001		5,000
E.	Convert Series A preferred and convertible notes (including principal
	and interest) to 10,000 shares of common stock
	Exchange preferred for common (QP Entity)	1352	A01	CABC	G000	900,000
	Exchange preferred for common (Offshore Entity)	1352	A02	IABC	G000	100,000
	Exchange preferred for common (Blocker Corp)	1352	I01	CABC	G000	100,000
	Exchange preferred for common (QP Entity)	1352	A01	CABC	C0A0		900,000
	Exchange preferred for common (Offshore Entity)	1352	A02	IABC	C0A0		100,000
	Exchange preferred for common (Blocker Corp)	1352	I01	CABC	C0A0		100,000
	Converted from debt principal (QP Entity)	1320	A01	CABC	G000	450,000
	Converted from debt principal (Offshore Entity)	1320	A02	IABC	G000	50,000
	Converted from debt principal (Blocker Corp)	1320	I01	CABC	G000	50,000
	Conv debt converted to equity (QP Entity)	1261	A01	CABC	A001		450,000
	Conv debt converted to equity (Offshore Entity)	1261	A02	IABC	A001		50,000
	Conv debt converted to equity (Blocker Corp)	1261	I01	CABC	A001		50,000
	Converted from debt interest (QP Entity)	1325	A01	CABC	G000	45,000
	Converted from debt interest (Offshore Entity)	1325	A02	IABC	G000	5,000
	Converted from debt interest (Blocker Corp)	1325	I01	CABC	G000	5,000
	Accrued interest receivable	1710	A01	CABC	A001		45,000
	Contra - Blocker interest capitalized	1329	A02	IABC	A001		5,000
	Accrued interest receivable	1710	I01	CABC	A001		5,000
	Shares expected (by QP Entity)	1510	A01	CABC	C0A0		90,000
	Shares expected (by Offshore Entity)	1510	A02	IABC	C0A0		10,000
	Shares expected (by Blocker Corp)	1510	I01	CABC	C0A0		10,000
	Shares expected (by QP Entity)	1510	A01	CABC	G000	9,000
	Shares expected (by Offshore Entity)	1510	A02	IABC	G000	1,000
	Shares expected (by Blocker Corp)	1510	I01	CABC	G000	1,000
F.	Return Series A preferred stock certificates
	Shares received (by QP Entity)	1520	A01	CABC	C0A0		90,000
	Shares received (by Offshore Entity)	1520	A02	IABC	C0A0		10,000
	Shares received (by Blocker Corp)	1520	I01	CABC	C0A0		10,000
G.	Receive common stock certificates
	Shares received (by QP Entity)	1520	A01	CABC	G000	9,000
	Shares received (by Offshore Entity)	1520	A02	IABC	G000	1,000
	Shares received (by Blocker Corp)	1520	I01	CABC	G000	1,000
H.	Fund $10,000 of blocker expenses
	Invested - Blocker expenses	1319	A02	IABC	G000	10,000
	Cash (of Offshore Entity)	1000	A02	0000	0000		10,000
	Cash (of Blocker Corp)	1000	I01	0000	0000	10,000
	Contributed Capital (Blocker Corp)	3191	I01	E20F	0000		10,000
I.	Sell common shares for $3M including 10% escrow (presume that
	Offshore Entity sells blocker shares in transaction)
	Cash (QP Entity)	1000	A01	0000	0000	2,430,000
	Cash (Offshore Entity)	1000	A02	0000	0000	270,000
	AR - Securities sold (QP Entity)	1720	A01	CABC	G000	270,000
	AR - Securities sold (Offshore Entity)	1720	A02	IABC	G000	30,000
	Sale of equity (QP Entity)	1372	A01	CABC	G000		1,395,000
	Sale of equity (Offshore Entity)	1372	A02	IABC	G000		160,000
	Cash realized gain (QP Entity)	4521	A01	CABC	G000		1,305,000
	Cash realized gain (Offshore Entity)	4521	A02	IABC	G000		140,000

(You would also relieve shares expected and received on the sale date by reversing the related entries.)

J.	Collect 75% of the escrow and write-off balance
	Cash (QP Entity)	1000	A01	0000	0000	202,500
	Cash (Offshore Entity)	1000	A02	0000	0000	22,500
	Cash realized gain (QP Entity)	4521	A01	CABC	G000	67,500
	Cash realized gain (Offshore Entity)	4521	A02	IABC	G000	7,500
	AR - Securities sold (QP Entity)	1720	A01	CABC	G000		270,000
	AR - Securities sold (Offshore Entity)	1720	A02	IABC	G000		30,000

APPENDIX C

© 2006, Jayne Thompson

Example Accounting Entries

	Capital	Main	Entity	ID	Type
	Commitment	Segment	Segment	Segment	Segment	DR	CR

Example Assumptions for Main Fund Partnership (Entity A01)
ABC Limited Partner	95,000			P002
General Partner	5,000			PG01
Total	100,000
Other assumptions:
2% management fee
20% of GP contributions done on a cashless basis
Sample entries:
A. Record initial commitments
Initial commitment - ABC		3001	A01	P002	0000	95,000
Initial commitment - GP		3001	A01	PG01	0000	5,000
Remaining commitment - ABC		3002	A01	P002	0000		95,000
Remaining commitment - GP		3002	A01	PG01	0000		5,000
B. Call $20,000 for investments plus management fee (assume you
call a full year of fees to simplify example calculations)
Capital call receivable - ABC		1100	A01	P002	0000	20,900
Capital call receivable - GP		1100	A01	PG01	0000	800
Contributions - No self chg mgmt fee offset		3100	A01	PG01	00ZZ	100
Contributions - Deemed offset		3100	A01	PG01	00ZY	200
Contributions - ABC		3100	A01	P002	00CC		20,900
Contributions - GP		3100	A01	PG01	00CC		1,100
The JE date should be the DUE date of the call. We typically
include the call date in the description.
Remaining commitment - ABC		3002	A01	P002	0000	20,900
Remaining commitment - GP		3002	A01	PG01	0000	1,100
Commitment fulfilled - ABC		3003	A01	P002	0000		20,900
Commitment fulfilled - GP		3003	A01	PG01	0000		1,100
C. Collect capital call
Cash		1000	A01	0000	0000	20,900
Capital call receivable - ABC		1100	A01	P002	0000		20,900
Cash		1000	A01	0000	0000	800
Capital call receivable - GP		1100	A01	PG01	0000		800
D. Pay management fees, net of deemed offset
Management fees		7100	A01	0000	0000	1,900
Management fees - Deemed offset		7100	A01	0000	00OC		200
Cash		1000	A01	0000	0000		1,700