OpenIM The Open Investment Model

SD-03.9 — Fund-Commitment Approval & Authorisation

Business Domain: BD-03 Manager & Fund Investment (Front office) · Applies: PRIV

Purpose

The governance gate between BD-03’s diligence streams (SD-03.3 ODD, SD-03.4 IDD) and the legal close (SD-03.5 Commitment & Subscription). SD-03.9 owns the Investment Committee capability for the fund-investing route — the recommendation synthesis, the staged committee process, the approval decision, the conditions of approval, and the authority-and-mandate verification that the firm has authority to make this commitment and that it fits the firm’s allocation and pacing plan. Every LP allocator (pension, SWF, endowment, OCIO, fund-of-funds) runs fund commitments through an IC; SD-03.9 is that IC. The capability is structurally parallel to SD-04.5 Investment Approval & Authorisation in BD-04 — the IC gate for the direct-investment route — but operationally distinct. The decision record both routes co-own is E-34 Investment Authorisation; on this route its subject is the fund (PM-01). The direct route’s subject set now also includes the first-class deal record (PM-15 Deal / Investment Opportunity) — a shared-schema extension both co-owning routes hold jointly; the fund-commitment route’s own subjects are unchanged by it.

Service Operations

  • Synthesise the recommendation memorandum — assemble the IC memorandum: the GP and fund summary, the strategy thesis, the IDD findings, the ODD findings, the fund terms, the recommended commitment size, the pacing-plan fit, the portfolio-construction rationale.
  • Operate the staged committee process — run the preliminary IC (pre-diligence sanity check or staged review) and the final IC (approval-decision body); record discussion, dissent, conditions and the decision.
  • Authorise the commitment — record the approval, the approved commitment size and the conditions of approval (e.g. side-letter negotiation outcomes that must hold before close).
  • Verify authority and mandate fit — confirm the firm has corporate authority to enter the commitment (board / committee delegations) and that the commitment fits the mandate, asset allocation and pacing plan (SD-01.10).
  • Manage the IC pipeline and cadence — schedule the IC cadence, manage the pipeline of fund opportunities through staged review, and track decision throughput and rejection rates.

Inputs and outputs

  • Inputs: the ODD report (SD-03.3); the IDD report (SD-03.4); the GP and fund records (SD-13.2, SD-13.3); the mandate and portfolio-construction context (SD-01.2, SD-05.1); the commitment-pacing plan (SD-01.10); the LP-commitment portfolio shape (SD-05.10 manager structure).
  • Outputs: the IC memorandum, the approval decision and conditions, the authorisation record — consumed by SD-03.5 Fund Commitment & Subscription (which cannot proceed without the SD-03.9 authorisation), by SD-12.8 Capital Call & Distribution Processing (for the commitment record on the funds-flow side), and by SD-16.1 Corporate & Fund Governance (the governance machinery the IC operates within).

Entities

  • Consumes: the ODD and IDD outputs (Service-Domain artefacts of SD-03.3 / SD-03.4); E-01 Legal Entity (the GP); E-03 Portfolio / Mandate (the mandate facet from SD-01.2); PM-10 Fund Terms (the LPA); the SD-01.10 commitment-pacing plan; the SD-05.1 mandate and portfolio-construction context; the SD-05.10 LP-commitment portfolio shape; the SD-13.2 GP and fund records; the SD-13.3 GP and fund records.
  • Owns: E-34 Investment Authorisation — co-owned with SD-04.5 Investment Approval & Authorisation (the BD-04 IC for the direct-investment route). One concept, two co-equal owners: the fund-commitment IC view (SD-03.9) and the direct-investment IC view (SD-04.5) of the same kind of governance record — the IC memorandum, the decision, the conditions, the authority and mandate verification, the dissent. The investment_route = fund_commitment records the route, but it is not a partition key; the two SDs co-own the entity outright in the E-27 pattern. The full pattern is documented in ownership-map.md. The IC pipeline as a Service-Domain artefact remains; the IC Memorandum as a separate first-class entity is an open extension.

Standards

  • No external standard governs the investment committee. The IC memorandum as the canonical synthesis artefact, and the staged committee (preliminary and final IC), are practitioner conventions. The committee operates within the firm’s governance framework (BD-16 SD-16.1 maintains the corporate governance structure; BD-14 SD-14.1 maintains the enterprise risk-appetite framework the IC’s risk decisions operate within).
  • ILPA does not publish a dedicated “investment committee” standard. The IC capability is supported by two adjacent ILPA publications: the ILPA Due Diligence Questionnaire 2.0 (2021, the standardised diligence schema the IC memorandum’s IDD/ODD synthesis is built from) and ILPA Principles 3.0 (2019, the governance, transparency and alignment-of-interest principles the IC’s terms-and-conditions assessment applies); both are referenced here as practitioner background, not as IC-specific standards.
  • The cross-archetype practitioner shape — pension and SWF Investment Committee charters, endowment / foundation IC discipline, OCIO fiduciary delegation authority — varies by archetype but the capability is universal.

Open extensions

  • The IC Memorandum entity (the memorandum referenced by the E-34 Investment Authorisation through Document Metadata; whether the memorandum itself warrants first-class status alongside the authorisation is open).
  • The relationship-to-SD-04.5 question: whether a firm with one combined IC across direct and fund routes consolidates these capabilities at the implementation level (the OpenIM model carries them as distinct capabilities co-owning the one authorisation entity; an implementation may operate them as one body).
  • The conditional-approval sub-model — how IC conditions interface with SD-03.5’s close gating.

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