Investment Partnerships in Quicken

Investment Partnerships let you track limited partner (LP) interests in venture capital and private equity funds. Use this feature to record capital calls, distributions, and periodic valuation updates based on your fund’s reports.

What you should know before you start

Investment partnerships often involve multi-year investing and complex tax reporting. Quicken can help you track balances and pre-tax performance, but you should rely on your fund’s capital account statements and K-1s for tax planning and preparation.

Key terms

Use these definitions to interpret fund statements and choose the right transaction action in Quicken.

Capital commitment
The amount you agree to invest in the fund over time.

Capital call
A request from the fund to contribute part of your capital commitment.

Capital account value
The current value of your partnership interest reported by the fund. This value does not include distributions you have already received.

Cash distribution
A payout of cash from the fund to you. Funds often report tax-related details later on the K-1.

Stock distribution
A payout of securities from the fund to you. The fund typically provides a cost basis and cost basis date for the securities distributed.

TVPI (Total Value per Invested $)
(Current value + distributions) ÷ paid-in capital.

DPI (Distributions per Invested $)
Distributions ÷ paid-in capital.

IRR
Internal rate of return based on contributions, distributions over time, and remaining value.

Add an Investment Partnership account

The add-account path is easy to miss. Create the account first so you have a place to store the partnership transaction history.

1. Click Add Account (or choose Tools > Add Account).

2. Select + Offline Account.

3. Under Investing & Retirement, click Other Investments.

4. Select Investment Partnerships, and then click Next.

5. Follow the prompts to name the account and choose its intent (Business or Personal).

Set up your first partnership

When you open the account for the first time, Quicken prompts you to create the partnership security.

1. In the Partnership – Set up window, enter the partnership details.

2. Enter your capital commitment, the partnership establishment date, and (optionally) the partnership tax ID.

Decide where partnership history is stored

Before you enter activity, decide which investment account will contain the transaction history for your LP interests. This account should be manual.

You can track all partnerships in a single account (for example, “PE & VC Funds”), or use separate accounts for different partnerships.

What Quicken tracks and where it goes

Quicken tracks an LP interest as a security with security type Inv Partnership. Quicken assigns the Alternatives asset class to these securities.

How value is represented

Quicken uses shares and price to represent your partnership interest.

• Each dollar you contribute corresponds to one share of the partnership interest.

• The share price represents the value of your interest divided by the number of shares.

• When you update the value (for example, using your quarterly statement), Quicken updates price history for the partnership security.

Which accounts are involved

Partnership transactions often affect more than one account.

• Investment Partnership account: Holds the partnership transaction history and partnership security.

• Funding account: The bank or brokerage account money comes from during a capital call.

• Receiving account: The account that receives distributed cash or securities.

Enter partnership activity

Quicken provides five investment actions for partnerships in the Enter Transactions wizard. To open it, go to the account that holds the partnership and click Enter Transactions.

Partnership – Set up

Use Partnership – Set up to create the partnership security and enter the capital commitment and related details. If you need to add another partnership later, use this action again.

Setting up the first partnership also enables the partnership reports under Reports > Investing.

Partnership – Capital Call

Use Partnership – Capital Call to record a contribution when the fund calls capital. Use this action (not a standard buy) so Quicken can track commitment and paid-in totals.

You’ll be asked for:

• The amount of the capital call

• The account the funds come from (optional)

• Whether to increase the market value by the amount of the call (on by default)

If you choose a funding account, Quicken can also create the related withdrawal/transfer transaction in that account.

Partnership – Distribution

Use Partnership – Distribution to record cash or securities you receive from the fund.

You’ll be asked for:

• Distribution type (cash or securities)

• Total distribution value

• Return of capital amount (if known)

• Receiving account (cash deposit or investment account for securities)

• Cost basis and cost basis date for securities (if provided by the fund)

How Quicken records distributions

Quicken records distribution activity in the account that holds the partnership interest.

• The distribution value (less any capital returned) is recorded as a MiscExpX transaction.

  • Category: Realized Gain for cash distributions

  • Category: Unrealized Gain for stock distributions

• Returned capital is recorded as a RtrnCapX transaction.

For cash distributions, the transfer account is the account where you deposit the funds.

For stock distributions, Quicken uses self-transfers to reflect that there is no cash movement. The distributed securities appear as an Added transaction in the receiving investment account using the cost basis and cost basis date you provide. Quicken also updates price history for the securities received to reflect their current value.

Quicken also provides an option (off by default) to reduce the partnership market value by the distribution amount. You may want to enable this for a large distribution that materially reduces the remaining value.

Partnership – Set Value

Use Partnership – Set Value to enter the current total value of your partnership interest shown on your capital account statement.

This value is the remaining value in the fund and does not include prior distributions. Quicken makes a price history entry to reflect the value you enter.

Partnership – Close Out

Use Partnership – Close Out when the partnership is no longer active.

This action sets the partnership share balance (and market value) to zero and hides the partnership so it is excluded from reports by default. You can still include closed partnerships by customizing the partnership reports.

Example workflow

This example shows which action to use for common events.

1. Create the account and run Partnership – Set up with a $100,000 commitment.

2. When the fund calls $25,000, enter Partnership – Capital Call for $25,000 (and select the account the funds come from, if you want Quicken to create the related transaction).

3. When your quarterly statement shows the capital account is now $28,000, enter Partnership – Set Value for $28,000.

4. When you receive a $5,000 cash distribution and the fund reports $2,000 as return of capital, enter Partnership – Distribution with a $5,000 distribution and $2,000 return of capital, and select the deposit account.

Use partnership reports

Quicken provides two reports for partnerships: Investment Partnership Summary Report and Investment Partnership Detail Report. These reports appear under Reports > Investing only after at least one Inv Partnership security exists.

Investment Partnership Summary Report

Use this report to answer: “How much have I committed, paid in, received back, and what is my current value?”

This report summarizes:

• Capital commitments (total, remaining, paid-in)

• Total distributions received

• Current value

• DPI, TVPI, and IRR

Investment Partnership Detail Report

Use this report to answer: “Which cash flows are being used to calculate IRR?”

This report lists the cash flows used to calculate IRR for each fund and for all funds together. It also includes partnership details such as creation date and tax ID.

Tax notes and limitations

Quicken tracks pre-tax performance of investment partnerships, but tax detail at distribution time may be limited by what the fund provides. For example, you might not have enough information at the time of a cash distribution to correctly split returned capital from ordinary income and short-term or long-term gains.

For tax planning and preparation, rely primarily on the partnership’s K-1s and capital account statements.Note for our Canadian Customers

The following terms will be different in the Canadian releases of Quicken.

Canada: "Cheque" / United States: "Check"
Canada: "Colour" / United States: "Color"
Canada: "Centre" / United States: "Center"
Canada: "Realise" / United States: "Realize"
Canada: "Behaviour" / United States: "Behavior"
Canada: "Analyse" / United States: "Analyze"