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What are the consequences for investors who fail to meet their capital call obligations, and how do funds typically handle such situations?

1 See in Base
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If an investor fails to meet their capital call obligations, the consequences are governed by the Limited Partner Agreement (LPA). Typically, there are strict penalties, such as interest on unpaid amounts, forfeiture of the investor's interest, or selling the defaulting partner's interest at a discount. The general partner has discretion on handling defaults, which may include leniency or pursuing legal remedies. Each fund's LPA will detail specific actions and penalties.

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