Operationally, it is usually handled in this order, subject to the LPA:

- Best case: the defaulting LP transfers or sells their entire fund interest to a replacement buyer, with GP approval
- Common fallback: reduce the LP’s effective commitment to the amount already funded
- this lowers future callable capital
- and usually lowers management fees tied to that commitment
- Last resort: invoke the LPA default remedies
- e.g. penalties
- forced sale at a discount

Important:
- LPs should generally stay on the same capital call schedule
- special exceptions can create fiduciary issues

For small emerging funds, defaults are generally not presented in Decile Base as common, but they are a real risk because future callable capital can shrink materially.

References:
- https://decilehub.com/base/1-general_questions/21163-1-what-happens-to-the-overall-committed-capital-for-portfolio-companies-in-case-of-a-partial-or-complete-lp-default-how-can-gps-mitigate-the-risk-that-there-is-no-additional-capital-once-there-is-a-default-e-g-a-forced-sale-is-not-possible
- https://decilehub.com/base/1-general_questions/163981-what-remedies-are-available-if-an-lp-fails-to-fund-a-valid-capital-call