A warehouse vehicle is a temporary entity used by a GP to hold investments made before the fund's first close. Once the fund closes, the warehouse investments are typically transferred ("rolled in") to the fund at cost.
Why It Matters
Warehouse vehicles let you act on attractive deals during fundraising rather than losing them to competitors. Without one, you either miss time-sensitive deals entirely or make personal investments that create conflicts of interest when the fund eventually closes. A properly structured warehouse vehicle keeps your deal pipeline moving while the fundraise is still underway.
Key Details
- Usually structured as a simple LLC funded with GP capital or bridge capital from early LPs.
- Investments are transferred to the fund at cost. If the investments have appreciated, transfer at fair market value requires LP consent.
- The warehouse vehicle and its investments must be disclosed in the private placement memorandum.
- The roll-in to the fund typically happens at the first close or the final close, depending on the terms.
- Any gains or losses between acquisition and roll-in belong to whoever funded the warehouse, not the fund's LPs.
For a deeper look at warehouse structures and their uses, see Warehouse Vehicles.
Capital Company handles warehouse vehicle formation and roll-in accounting as part of fund administration.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation.