Final close is the conclusion of a fund's fundraising period, after which no additional investor commitments are accepted. At final close, the fund's total committed capital is determined.
Final close typically occurs within 12-18 months of the first close. Once reached, the total fund size is locked, all investor commitments are finalised, and late-joining investors may be subject to equalisation payments to compensate earlier investors. The management fee base is finalised based on total commitments, and any preferential fee arrangements for early closers typically expire.
Fund managers must balance maximising fundraising against the operational complexity of keeping fundraising open too long. Each additional close creates administrative work and slightly different investor cohorts. Some managers establish a hard deadline for final close even if they haven't reached their target amount, whilst others remain flexible if momentum continues.
