Tracking Investments in Partnerships

bkinva

I am curious about how others treat their investments in partnerships, specifically as it relates to the value of the invested dollars.

Generally, here's what I do in QWin for the handful of investments that I've made into private equity LLP SPVs as a LP. 1) I created a separate, offline/disconnected account in Quicken (e.g.: "PE Investments"). 2) I create a separate manual Security for each investment (e.g., PE Investment #1, PE Investment #2, …). 3) When I contribute capital, I transfer $ from whatever source account I'm using for the purchase into the "PE Investments" account and then purchase that # of shares (e.g., if it's a $25k contribution to PE #1, I purchase 25,000 shares of PE #1 at $1 each). To-date, I have not updated the share price of the investments, although I understand some may do this based on current NAV as conveyed by the GP.

Although I'd welcome any observations on the above, here's my question. I've received a handful of distributions some of which are identified as Return of Capital in the distribution statement. My understanding of a RoC event is that it reduces my commitment amount and funded-to-date amount accordingly (so, e.g., if I had a $100k commitment, had funded $70k to date leaving $30k unfunded, and received a $10k RoC distribution, then my updated values would be: commitment: $90k, funded: $60k, unfunded: $30k).

First, is that understanding correct? Second, should I be reflecting that in Quicken? If so, what's the best way to do so?

There's the check-box to "Reduce the partnership market value by the distribution amount" when entering a Distribution. If I select that, it keeps the number of shares but reduces the share price in order to reduce the market value. In my brain, it makes more sense to keep the share value at $1 and instead reduce the number of shares, but I don't know what the normal approach might be. (And in QMac, which I'm in the process of transitioning to and where I'd be doing this manually since it doesn't have the Partnership functionality, it seems like that approach would be more straightforward).

It makes sense to me to reduce the contributed $ when receiving a RoC, as eventually (hopefully!) I'll get a full RoC of all contributed $ and the account/security value should decrease accordingly over time.

Thoughts?

Quicken Anja

Hello @bkinva,

Thanks for sharing your detailed approach and questions regarding tracking private equity or partnership investments in Quicken. Since these are manually tracked investments, there isn’t a single “correct” method for handling Return of Capital (RoC) distributions, and different users may handle it differently based on their own preferences or reporting needs.

Because Quicken for Mac doesn’t currently include the Partnerships functionality, any adjustments for RoC would need to be done manually, as you noted.

I’d recommend seeing what approaches other users in the community have found helpful, or consulting with a financial advisor if you want guidance specific to your investment reporting needs. My comment will also bump your post back to the top of the most recent discussions, hopefully getting more eyes on it.

Thank you!