Final close
The last date on which new investors can join, ending the fundraising period.
The LPA sets a window, often twelve to eighteen months from the first close, for reaching the final close. After that the fund's size is fixed.
Extensions beyond the period set in the LPA usually need LPAC or LP consent. A fund that reaches its final close quickly and near its hard cap sends a strong signal for the next raise.
After the final close the manager focuses on investing and reporting, and the fund's commitments and investor base are fixed except for transfers. Some managers begin planning the next fund's LP list right away, using the relationships built during the raise.
Worked example
A fund holds its first close at $31M in month 7 and two further closes in months 11 and 15. It reaches its final close at $72M in month 18, just within the 12 month window after the first close set in its LPA, and stops accepting new investors.
Common questions about final close
How long after the first close is the final close?
Usually within 12 to 18 months, as set in the LPA. Extensions generally require LP or LPAC approval.
Can a fund accept investors after its final close?
Not as new commitments. After the final close, a new investor can only join by buying an existing LP's interest in a secondary transaction, with the GP's consent.