Glossary of Fund Accounting Terms

R

Rate of Return: Gain or loss on an investment over a specified period of time, expressed as a percentage increase over the initial investment.
Realized Gain / Loss: The difference between the purchase and sale price of a security. Realized gains are recognized at the time the security is sold. For tax purposes realized gains can be limited due to wash sale and other IRS rules.
Recallable Capital: Pertaining to private equity funds, the total amount of distributions that may be recalled by the fund at a future date.
Recallable Distribution: A provision of some private equity funds that allows them to require investors to re-contribute cash previously distributed to them.
Redemption: Liquidation of shares or interests in an investment fund.
Redemption Fee: A fee (usually 1-2%) charged to redeeming investors who withdraw their funds prior to the expiration of the lock-up period on their investment.
Return of Capital (ROC): Issuing back to an investor some or all of the funds they initially invested, thereby decreasing the tax basis of their investment.
Rounded NAV: A reporting convention whereby funds present shareholder values rounded to a particular decimal place. See also: net asset value (NAV)

Why is our software called "Penny" ?: Because our founder - a CPA, former hedge fund CFO, and programming guru - was hoping to purchase an accounting package. But none of the existing fund accounting systems could handle balancing complex partnership accounts down to that last penny. So he created one that could.

Is it "I.T. Works" or "it works" ?: Actually, its both. After a 2 week installation, our first customer was running so smoothly he told us we should call the software "it works". We had a name, but happily adopted the sentiment as our tagline. The logo artist thought it was "I.T." - as in information technology - and a pun was born.

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