Overview
- The draft allows closed-ended schemes to base distributions on total or undrawn commitments, with a clearly disclosed method in the PPM that can include time-weighted pro-rata.
- Open-ended Category III schemes are exempt from pro-rata drawdowns and must distribute by units held, with closed-ended rules triggered if they invest primarily in unlisted securities.
- Investments made on or before December 13, 2024 remain governed by previously disclosed terms, and existing schemes may continue their current approach for their tenure while future calls align with the new methods.
- Carried interest is excluded from the pro-rata requirement, and managers and trustees must maintain records and reflect adherence in compliance reports.
- Industry advisors flag unresolved issues such as the impact on differential fee arrangements, accounting for partially drawn investors, and the potential need to unwind existing structures.