Client impact · Guidance funds

Sub-fund deals stop arriving as email attachments

Q: Legacy sub-funds have no structured history. How far back do you backfill?

Only far enough to make the **current position explainable**: live holdings and ownership, the most recent valuation date, and the fields that drive recognition — registration place, round, investment date. Rounds beyond your assessment and audit horizon stay in the legacy record and are marked not comparable. Where a GP cannot confirm a historical value we do not compute one into the table; we prefer a blank with a stated reason over a guess that ends up in an assessment numerator.

A public guidance fund manager acts as LP, yet the question "which company did the money reach" lived inside each GP’s quarterly attachment. We did three things: model fund-sub-fund-deal as expandable objects, turn reinvestment rules into fields, and let the supervisory return, the internal scorecard and the LP pack draw from one ledger.

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Client anonymised by defaultFund-of-funds and guidance fund system14,000+ funds on the platform (book basis)LP and GP portal integration

The institution

Public money in, and a duty to say where it landed

The capital is fiscal and state-owned money committed through a guidance fund. The manager runs the mother fund, holds stakes in a portfolio of sub-funds and makes a small number of direct investments. Three roles sit on top of each other: the supervising authority and its committee set the assessment rules, the entrusted manager runs the fund day to day, and the sub-fund GPs hold the underlying facts.

The starting position was not weak. The manager kept valuation, commitment and expense ledgers and produced quarterly totals. What was missing was depth: which sector a sub-fund entered, at which round, where the investee is registered — all of it lived in GP attachments with inconsistent formats and different reference dates.

The binding constraint is annual recognition. Local reinvestment completion, leverage multiple, sector compliance and policy performance drive the next tranche, fee concessions and fund term, so every recognised figure must be evidenced.

Before the change: where the effort went

This describes what the work was and how it was spent. It carries no percentages. A claim about recognition speed only means something after we have measured it against your own historical attachments.

Step	Who carried it	How the effort was spent	Why it never closed
Reaching the deal layer	Investment team of the manager	Company name, round and registration place transcribed out of each GP attachment; sub-fund and SPV layers stitched together by hand	Attachments are not structured data, and one company carries two names across two GPs
Reinvestment recognition	Deal officer plus finance reviewer	Recognition elements — registration, tax domicile, real operation, incremental investment — judged case by case, evidence gathered in a rush at recognition time	The method document states rules in prose, never as fields and an evidence checklist
Performance accounting	Risk and finance, each with their own model	DPI, TVPI, MOIC, IRR and reinvestment completion computed in different spreadsheets at different reference dates	Valuation assumptions sat in personal models, so one date produced two answers
Chasing and disclosure	Post-investment and disclosure staff	GP submissions returned and re-returned; the pack for the authority and the internal monthly pack came from two sources	No single intake on the GP side, so disclosure could not tie back to the ledger

The judgement

Agree the reference date before you compute the look-through

Look-through fails for one reason more than any other: the layers are not on the same date. Some GPs report monthly, some at quarter end, some only after audit, so any total is a total of different days.

We fix the valuation and sector reference date at agreement level, so "as of when" becomes a field instead of a footnote. Only then are performance and recognition comparable.

Reference date first, structure second
A company name is not a key; a shared identifier is
Open recognition items stay out of the completed figure
Disclosure and assessment draw on the same ledger

Three steps we took

Model the layers, write the rules, close the exit

Each step has a deliverable and a named reviewer. None of them rewrites the authority’s assessment rules — we only land those rules in a system and an evidence chain.

01 · Model

Look-through across fund layers

Mother fund, sub-fund, investee company and investment round become four object types, each carrying effective date, commitment, contribution and ownership. Sub-fund-of-fund and SPV layers expand on demand, on one valuation reference date.

Deliverable: look-through ledger and date agreement
Deliverable: investee identifier rules
Reviewed by: manager’s investment team and finance

02 · Rules

Reinvestment recognition

Prose in the method document is broken into recognition elements, time windows and whether the test is by amount or by ratio. Each element carries its evidence requirement; contested items go to a ruling step rather than being settled at the desk.

Deliverable: recognition rule table
Deliverable: recognition register with open items
Reviewed by: supervising department and legal

03 · One source

Portal and filings

GPs submit through the portal on one template. The supervisory return, the internal performance board and the LP disclosure all generate from the same ledger instead of pulling their own numbers.

Deliverable: GP submission tasks and template
Deliverable: filing template map
Reviewed by: risk and compliance, disclosure desk

Modules and integrations in this scenario

Names follow the company’s published product list. Scope follows the method document and the assessment findings.

Fund-of-funds / guidance fund systemEquity investment systemInvestor relations systemLP and GP portalPortfolio managementVDR document repositoryPortfolio and fund risk monitoringFinancial statement OCRConfigurable data dictionaryPrivate cloud / intranet deployment

Acceptance measures

Same formula, tiers read as fund — sub-fund — deal

We take three of the four measures published on the client impact index and keep their wording untouched. In the definition-consistency formula, the tiers are read here as guidance-fund layer, sub-fund layer and investee layer; the calculation is unchanged — the share of identical metrics agreeing with zero variance.

How we recomputed them here

Measure	Calculation (as published)	Recomputation in this engagement	Sample and timing
Filing cycle	Calendar days from template issued to consolidated group submission	Read "template issued" as the day the assessment form or notice reaches the manager, and "consolidated submission" as the formal filing after internal review; taken from timestamps in the system, not from a rehearsal	One full assessment cycle before and after go-live, including the annual recognition window
Definition consistency	Share of identical metrics where the three tiers agree with zero variance	A pre-agreed set of shared metrics — invested amount, contributed amount, ownership, recognised reinvestment — compared layer by layer, each variance closed only by a definition or a named data source	Sample must include small sub-funds and any nested vehicle; head funds alone hide the problem
Manual fallback hours	Overtime hours during filing season ÷ people involved, from system-captured effort	Counted only for chasing GP data, re-returns and the evidence scramble before recognition, from logged effort; implementation hours kept separate	Reported per recognition season across two consecutive seasons, with return counts as corroboration

The value of a reinvestment ruling is not speed. It is the same conclusion standing on the same evidence three years later.Catalpa delivery methodology

14,000+

funds covered on the platform (book basis, not this fund’s count)

5.6RMB tn+

assets covered (RMB, platform book basis)

500+

institutions served on the platform (company disclosure)

10+

years of investment-sector experience (company basis)

Where this approach does not apply

If the guidance fund has no sub-funds invested yet, or the authority asks only for one annual table of commitments and contributions, look-through modelling and a portal are not worth the money — a disciplined template plus a recognition checklist is. And if GP reporting duties cannot be written into the partnership agreement or the concession terms, the platform will only ever record the fact that nothing arrived; the look-through ledger stays permanently incomplete. We flag that precondition during the assessment rather than promising around it.

Questions specific to guidance-fund delivery

Mechanism answers. They do not replace the written position of the authority or its committee.

Legacy sub-funds have no structured history. How far back do you backfill?

Only far enough to make the current position explainable: live holdings and ownership, the most recent valuation date, and the fields that drive recognition — registration place, round, investment date. Rounds beyond your assessment and audit horizon stay in the legacy record and are marked not comparable. Where a GP cannot confirm a historical value we do not compute one into the table; we prefer a blank with a stated reason over a guess that ends up in an assessment numerator.

GPs refuse the portal and the template. What then?

Two moves. Technically we shrink the minimum submission set to the fields that genuinely drive look-through and recognition, and keep narratives and appendices as uploads in the document repository. Contractually the reporting duty, reference date and return rules go into the next amendment or the concession terms. Until then the system marks the missing period as "not submitted" and the report excludes that sub-fund from the consistency denominator with the reason shown. We do not backfill on the GP’s behalf to make a gap look closed.

When reinvestment recognition is disputed, who decides and how is it shown?

The supervising authority or its nominated assessor decides — not the platform and not us. We decompose the method document into a signed recognition rule table, route contested items through a ruling step with the decision recorded, and on the report show unruled amounts in their own column rather than inside the completed figure. The number stays challengeable, but it never needs restating after a single rule change.

How do fund-of-funds and direct investment coexist in one system?

They share the investee and project master data; they do not share an approval chain or a valuation basis. Direct deals run origination, diligence and investment committee; fund work runs commitment, look-through and recognition. Both can attach to the same company, which is what lets you answer "did we also invest in this name directly". Merging the two flows mixes two different sets of decision-makers, and we advise against it.

Performance figures disagree with fiscal or audit numbers. How is that handled?

Both versions stay on the page with the reason annotated; we do not tune parameters until the two match. Differences normally come from three places: the valuation reference date, whether unfunded commitments count, and how fees and clawbacks are recognised. The data dictionary names the authoritative source per metric — accounting basis or assessment basis — the report follows that citation and the other version appears as a note. Whether a target is met remains the assessor’s call; our job is to put both numbers on the table.

Next step

Bring the latest reinvestment recognition form

In a 45-minute assessment we take it apart live: recognition elements, evidence gaps and where the look-through breaks, then a phased route that separates what can be automated from what must stay a human call.

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