Alternative Investments – Investments outside traditional listed equities and bonds, including private equity, private credit/debt, infrastructure, venture capital, real estate and hedge funds.

Capital Call (Drawdown) – A formal request by the GP for a portion of committed capital to fund investments or expenses.

Carried Interest – Performance-based compensation paid to the GP, typically a percentage of profits above a hurdle rate.

Closed-End Fund – A fund structure with a fixed life (typically 10–12 years), where capital is committed upfront and drawn over time.

Commitment – The total amount an LP legally agrees to invest in a fund over its life. Paid in gradually via capital calls.

Concentration Risk – Overexposure to a single manager, sector, geography or asset.

Deal Flow - The pipeline of investment opportunities reviewed by a GP.

Distributions to Paid-In (DPI) – Indicates how much capital has been returned to investors relative to what they contributed. Measures realised performance.

Deployed Capital – Capital that has been invested into underlying assets and is actively at work in the portfolio.

Dry Powder – Committed but uninvested capital available for deployment.

Due Diligence – Pre-investment investigation covering strategy, team, fees, governance, structure and risk.

Evergreen Fund – An open-ended structure allowing ongoing subscriptions and limited redemptions without a fixed termination date.

Exit – The sale or disposal of an investment (e.g., trade sale, IPO, secondary sale).

Final Close - The last stage of fundraising when the fund size is fixed and no new investors may enter.

First Close - The stage at which sufficient commitments are secured for the fund to begin investing.

Fund I / Fund II / Fund III - Successive funds raised by a GP. Later funds signal a more established track record but require evaluation of performance persistence.

Fundraising - The period during which a GP raises capital commitments from LPs.

General Partner (GP) – The fund manager responsible for raising capital, selecting investments, managing portfolio companies and reporting to LPs.

Harvesting Period – The later phase of a fund’s life when investments are exited and capital returned to investors.

Hurdle Rate - The minimum return a fund must achieve before the GP earns carried interest.

Illiquidity – Inability to sell an investment quickly without significant loss of value.

Illiquidity Premium – Additional expected return for locking capital up for long periods.

Impact Investing - Investments seeking measurable social or environmental outcomes alongside financial returns.

Infrastructure - Investments in essential physical assets such as energy, transport, utilities, telecommunications, and logistics systems.

Investment Committee (IC) - A body (within a GP or a pension fund) responsible for reviewing and approving investment decisions.

Investment Period - The early life of a fund (typically years 1–5) during which capital is actively deployed.

Investment Policy Statement (IPS) – Trustee-approved document defining investment objectives, permitted assets, governance and risk parameters.

Internal Rate of Return (IRR) – Annualised return measure that accounts for timing of cash flows, normally used to compare private market performance.

J-Curve – The typical early pattern of negative returns in private equity before later gains are realised.

Limited Partner (LP) – The investor (e.g., pension fund) that commits capital to a private market fund but does not manage investments.

Limited Partner Advisory Committee (LPAC) - A committee of selected Limited Partners (LPs) that provides oversight on conflicts, valuations, extensions, and other governance matters within a private market fund.

Liquidity Risk – The risk that the fund cannot meet benefit payments due to capital being locked in illiquid assets.

Look-Through Principle – Regulatory requirement to assess underlying exposures within pooled structures for compliance purposes.

Multiple on Invested Capital (MOIC) – Shows how many times the invested capital has been returned or created i.e the total multiple of invested capital (e.g., 1.8x means 80% total gain).

Management Fee – Annual fee paid to the GP for managing the fund, usually based on committed or invested capital.

Valuation Mark - Periodic valuation estimate of a private asset, as opposed to daily market pricing.

Net Asset Value (NAV) – The value of fund assets minus liabilities at a specific reporting date.

Pacing Strategy – Phasing commitments over multiple years to manage liquidity and vintage diversification.

Performance Fee - Compensation paid to the GP based on achieving defined performance thresholds.

Portfolio Company - An underlying business or asset owned by a private market fund.

Private Credit/Debt - Loans provided to companies outside traditional banking channels, typically illiquid and negotiated.

Private Equity (PE) - Equity investments in unlisted companies aimed at value creation and eventual exit.

Real Assets - Physical assets such as infrastructure, property, energy projects, and natural resources.

Recapitalisation - Restructuring of a company’s capital structure, often involving new debt or equity issuance.

Regulation 28 – South African prudential framework governing retirement fund asset allocation and risk management.

Strategic Asset Allocation (SAA) – The long-term asset mix designed to meet fund objectives within risk limits.

Style Drift – When a manager deviates from their stated investment strategy.

Total Value to Paid-In (TVPI): Measures total value (realised and unrealised) relative to capital paid in, a key indicator of overall fund return.

Uncalled Capital – The portion of committed capital not yet requested by the GP.

Valuation Policy - The documented methodology used to determine asset values in private markets.

Vintage Year – The year a fund begins investing. Important for comparing performance across market cycles.

Winding Down - The final stage of a fund’s life when remaining assets are exited and the fund is closed.