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The short answer
A quarterly LP update pairs a short letter with the financial package. The letter covers the quarter in three lines, a fund snapshot (called and distributed capital, TVPI, DPI and IRR), new investments and follow-ons, portfolio highlights and concerns, the partners' view of the market, fund operations and any asks.
ILPA's framework puts delivery within 60 days of quarter end for a direct fund, and 120 days for the quarter that ends the fiscal year. Your LPA has the final word.
The template
[FUND NAME], QUARTERLY LETTER, Q[ ] [YEAR] 1. THE QUARTER IN THREE LINES What changed, what we did, what comes next. 2. FUND SNAPSHOT (as of [date]) Fund size: Called to date (% of commitments): Distributed to date: Net TVPI / DPI / IRR: Companies in the portfolio (new this quarter): 3. NEW INVESTMENTS AND FOLLOW-ONS [Company], [stage], [cheque]: why we invested, in two lines. 4. PORTFOLIO HIGHLIGHTS Three to five companies, one line each, each with a number. 5. PORTFOLIO CONCERNS What is at risk, what we are doing about it, and any write-downs taken. 6. WHAT WE ARE SEEING One paragraph on the market, from the partners. 7. FUND OPERATIONS Capital calls and distributions this quarter, fees and expenses itemised, team changes. 8. HOW LPs CAN HELP Introductions, co-investment interest, expertise we are looking for. ATTACHED Financial statements, partners' capital account statement, schedule of investments, portfolio company updates, and ILPA templates where your LPA requires them.
What institutional LPs expect in the package
The Institutional Limited Partners Association (ILPA) sets out the minimum quarterly package LPs expect. It is a guide rather than a required format, but most institutional LPs read your reporting against it.
- A summary letter: the management discussion and analysis, which is the letter this template covers.
- The financial package: balance sheet, schedule of investments, statement of operations, statement of cash flows, partners' capital account statement and footnotes.
- Supplemental reports: an executive summary at firm and fund level, a supplemental schedule of investments, and an update on each active portfolio company.
When it is due
| Fund type | Quarterly report due | At fiscal year end |
|---|---|---|
| Direct fund (most VC funds) | Within 60 days of quarter end | Within 120 days |
| Fund of funds | Within 120 days | Within 180 days |
| Fund of funds of funds | Within 180 days | Within 260 days |
The 2026 ILPA templates
ILPA's updated Reporting Template applies from the first quarter of 2026, for funds still in their investment period or starting on or after 1 January 2026. A new Performance Template covers closed-end funds including venture capital, with data captured from the first quarter of 2026 and first delivery in the first quarter of 2027. ILPA applies the same expectations to every GP, whatever its size, including emerging managers.
Write the letter the way the partners talk
- Lead with what changed. Three lines that an LP could repeat to their investment committee.
- Keep the snapshot identical every quarter. The same metrics in the same order make the trend obvious.
- Name the write-downs. LPs find out anyway. Hearing it from you, with the reason and the plan, is what builds trust for the next fund.
- Bring one founder in. A short quote or story from a portfolio founder each quarter turns a report into a reason to keep reading.
- Ask for something. LPs are often senior operators and investors. A specific ask puts that network to work.
A filled-in example
An example written for this guide, for an imaginary seed fund. The numbers are illustrative.
Example · Seed fund
Q3 letter: four new companies, one write-down
- The quarter: We made four new investments, followed on in two, and wrote down one company that missed its raise.
- Snapshot: Fund size $60M; called 48%; distributed $0; net TVPI 1.21x; 23 companies, 4 new this quarter.
- Highlight: A robotics company we led at seed closed its Series A at three times our entry price.
- Concern: One fintech company missed its bridge round; we wrote it down 60% and are helping with a sale process.
- How LPs can help: Introductions to procurement heads at large logistics companies for two portfolio companies.
When a letter is not enough
The annual meeting and the launch of the next fund are where LPs decide whether to re-up. A short film from the partners, with founders on camera, carries the story better than another page. We made the 2026 Investor Day film for Waterfield Advisors' Fund of Funds; see our work for VC firms.
Questions people ask
What should an LP update include?
A short letter on what changed, a fund snapshot (called and distributed capital, TVPI, DPI and IRR), new investments and follow-ons, portfolio highlights and concerns, the partners' market view, fund operations and any asks, sent with the financial package.
How often do VC funds update LPs?
Quarterly is standard, with an annual report that includes audited financials. Many funds also send a short note when something material happens between quarters.
How soon after quarter end are LP reports due?
ILPA's framework puts it within 60 days for a direct fund and 120 days for the fiscal year-end quarter. Funds of funds get 120 and 180 days. The fund's LPA sets the binding deadline.
What is the ILPA reporting template?
A standard format from the Institutional Limited Partners Association for reporting fees, expenses and carried interest to LPs. An updated version applies from the first quarter of 2026, and a new Performance Template has its first delivery in the first quarter of 2027.
Do emerging managers have to follow ILPA?
ILPA's guidelines are voluntary, but LPs read reporting against them and often ask for the templates. ILPA applies the same expectations to every GP regardless of size.
