Questions investors ask us

Croton turns the irregular capital calls on the commitments you choose into a regular monthly or quarterly payment. Your payments go into an account in your name, and calls are paid from it.

When a call arrives before enough has accumulated, Croton advances the difference, up to a limit set in advance, and your later payments repay it.

Private market investors with commitments to several funds: individuals, family offices, and the registered investment advisers and multifamily offices that manage private market portfolios for their clients. It suits investors who would rather plan around a schedule than keep a large reserve on standby.

Unfunded commitments to private funds that pass Croton’s eligibility review. Eligibility will depend on the fund, its documents and the information available about it, as well as on underwriting of the investor. Not every commitment will qualify.

Yes. You choose which commitments to enroll. Any you leave out are funded as they are today, outside the arrangement.

No. You keep your fund interests and remain the limited partner, with the same obligations under the fund documents. Capital call notices continue to come to you. With your authorization they also go to Croton, so that it can arrange payment, and the manager may need to acknowledge that arrangement.

By the commitments you enroll and the period over which they are normalized. In the illustrative example used on this site, $1,000,000 of covered commitments over four years becomes sixteen quarterly payments of $62,500, before fees.

The period is typically four to five years, broadly matching the investment periods of the underlying funds. Your schedule is fixed in your agreement.

Your accumulated contributions are used first. If an eligible call is larger than what has accumulated, Croton advances the difference, provided the total outstanding stays within your maximum advance. Your later contributions repay the advance before a balance builds up again. A financing charge applies while an advance is outstanding.

Your contributions continue on schedule, and whatever is not yet needed accumulates in your account for later calls. Nothing is advanced, so no financing charge arises.

Croton’s advances are capped at the maximum agreed with you. If a call is larger than your accumulated balance plus the advance still available, you pay the remainder to the fund yourself, as you would today.

In the worked example on How It Works, a quickly deployed set of funds leaves $32,500 for the investor to pay directly. The limit is a revolving amount, not a line of credit for the whole commitment.

They stay in your segregated account and are used for later eligible calls and, where needed, to repay advances. Committed balances cannot be freely withdrawn during the term.

At the end of the term, calls, contributions, advances, charges and any remaining balance are reconciled. How the balance is invested in the meantime is not part of the arrangement.

The arrangement uses equal monthly or quarterly contributions over a fixed term, so the schedule does not change once it is set.

If commitments remain uncalled at the end of the term, an extension, a revised schedule or a settlement is agreed under the terms of your agreement.

You do. Your contributions are held in a segregated account at an independent custodian, and you remain the beneficial owner. Croton is authorized to direct payments from the account for your eligible calls and for the repayment of its advances to you.

The structure keeps your balance apart from Croton’s own assets and creditors. The legal protections that apply are set out in your account documentation.

No. Your commitment to each fund remains yours in full. Croton changes the timing of your payments; it does not take on, replace or guarantee your obligations to the general partner.

Croton’s security is generally its rights under the agreement with you and the repayment of any advances it makes, with additional collateral only where underwriting requires it.

Croton does not seek a pledge of your underlying fund interests.

You receive notice and a cure period of ten business days. During that period Croton continues to fund eligible calls within the agreed limits, provided no other default has occurred.

If the payment is still not made, Croton may suspend new funding, require amounts due to be repaid and exercise its agreed remedies. Funding already confirmed for a particular call is generally honored. Your obligations to each fund continue throughout.

Any advances and charges relating to that commitment would need to be settled, or the buyer would need to take them on with Croton’s approval. Any consent the general partner requires for the transfer would also be needed.

You remain responsible for meeting the call, because your obligation to each fund does not depend on Croton.

The circumstances in which Croton is obliged to advance, and any conditions on that obligation, are set out plainly in your agreement.

No. Each investor’s contributions are held in that investor’s own segregated account and are not available for another client’s calls without the account holder’s separate, express authorization. Croton funds its advances from its own capital and financing, which are kept separate from client accounts.

Croton charges an annual normalization fee on your covered commitments, illustratively 0.40% a year, and a financing charge on any advance while it is outstanding. Your pricing is set out in your agreement.

Yes. The normalization fee applies to your covered commitments whether or not Croton advances anything. The financing charge applies only to advances while they are outstanding, at Croton’s funding cost plus a spread. If your calls never run ahead of your contributions, there is no financing charge.

There is no published minimum. The $1 million used in the examples on this site is for illustration only.

Write to us through the contact page. We would be glad to walk through the mechanics against your own commitments.