Quarterly LP Letter Template

Use the same order every quarter so LPs can set one letter beside the last. Pair it with the quarter's financial statements and capital account statements: the letter is where you explain what they show.

Draft only after the books have closed. Take every figure from the quarterly package your administrator or accountant produces: financial statements, capital account statements and a performance summary. If a number the letter needs is missing, ask for it. A figure you work out yourself may not match your administrator's, and any gap tends to surface in front of an LP.

Your limited partnership agreement (LPA) sets the deadline, and the Institutional Limited Partners Association (ILPA) offers a benchmark. For its quarterly reporting templates, ILPA promotes delivery within 60 days after quarter-end, or 120 days for the fiscal year-end quarter¹, for funds that invest directly.

In the US, the SEC's 2023 private fund adviser rules would have required registered advisers to send quarterly statements² on fees, expenses and performance. A federal court vacated those rules, effective June 5, 2024³, so check your LPA and side letters for what you owe each quarter.

If LPs ask for ILPA's formats, use the ILPA Reporting Template⁴, designed to make reporting of fees, expenses and carried interest more uniform. Its January 2025 update is meant for funds that were in their investment period during Q1 2026 or began operations on or after January 1, 2026.

Invest Europe, an association of private capital providers, defines the three multiples. DPI (distributions to paid-in capital) measures what a fund has returned to investors against the capital they paid in. RVPI (residual value to paid-in capital) measures the fair value of what the fund still holds against the same base. TVPI (total value to paid-in capital) is the two combined⁵. Then check the package:

• TVPI equals DPI plus RVPI
• Total value equals NAV plus cumulative distributions
• Beginning NAV, plus contributions, minus distributions, plus or minus gains and losses, minus fees and expenses, equals ending NAV
• This quarter's beginning NAV equals last quarter's ending NAV
• Cumulative capital called and distributions never go down
• Any figure that appears twice in the package agrees with itself

When something doesn't tie, send both figures back to whoever produced them rather than picking the one that looks right. A 0.01x gap between TVPI and DPI plus RVPI can be rounding, but confirm it before calling it that.

Label every performance figure net or gross, and say what it is net of. Invest Europe says fund-level TVPI should be disclosed on a net of fees and carry basis⁵. Describe accrued carried interest as accrued rather than earned, and unrealized values as estimates.

Write the opening as if it is all an LP will read. In two or three sentences, say where NAV ended, what moved it and what an LP most needs to know. If a company was written down, name it here with the reason, not in a schedule three pages later.

Leave out the market essay. Your LPs get plenty of macro commentary elsewhere, and this is the one letter about your fund. Include market context only when it explains a decision you made.

Give each new investment a short paragraph. Say what the company does in words an LP could repeat to their own committee, then give the round, your check, your ownership and why you invested. Your investment committee memo already holds the thesis; borrow its clearest sentence, not its length.

For follow-ons, give the amount and the real reason, including when a round was defensive. For exits, report proceeds as the package states them, what has been distributed and anything held back in escrow or tied to an earnout. Describe each company the way you did last quarter, and say so when the story changes.

Report down rounds, write-offs and founder departures in the prose. Before you mention news a company hasn't announced, remember that a letter can be forwarded to people you didn't choose.

The raw material arrives all quarter. Ask each company for a regular investor update or a monthly management report, and log news the week it happens rather than rebuilding the quarter from memory.

List the quarter's calls and distributions with dates and amounts, the remaining unfunded commitment, and the calls you expect next quarter, labeled as an expectation. LPs use this paragraph to plan their own cash. Keep the outlook to plans an LP can hold you to, such as pacing and reserves, and never project returns.

End with the same disclosure block every quarter, changed only on counsel's advice. If your firm is registered with the SEC, a letter shared with prospects, or one that pitches your next fund, may count as an advertisement under its marketing rule.

That rule covers communications that offer your services to prospective investors or new advisory services to current ones⁶. In an advertisement, any gross return must come with the net return, shown at least as prominently and calculated over the same period.

The template at the top of this page includes the tie-out checks above as a Figure Checks document, plus a Letter Style Guide. River can learn your voice from a past letter and draft the next one from your package.