Managing Reinvestments
Distribution reinvestments allow investors to automatically reinvest their distributions back into the fund instead of receiving a cash payout. By default, reinvestments are issued into the same unit class, but fund managers can configure custom rules to reinvest into a different unit class within the same fund.
Current Limitations
Distribution reinvestment works best on funds where the entire net distribution can be reinvested without loss. However, Caruso now supports reinvestments on funds with varying unit prices, displaying any rounding difference to administrators before confirmation.
How rounding is handled:
When a distribution cannot be reinvested into exact units (for example, if an investor earns $123.45 and the fund's unit price is $1.00 but trades in whole units), the system will:
Display a warning on the draft and confirmed distribution views showing the total rounding difference
Include rounding details in the Reinvestment report for review
Allow administrators to proceed with the distribution after acknowledging the rounding impact
Note: The rounding warning only appears when there is a difference greater than $0.
Capturing Reinvestment Preferences
Reinvestment preferences can be captured at two stages:
During the application process:
If enabled on the capital raise, investors are asked to confirm their preferred method for receiving distributions when completing their application
Options are Direct Credit (distributions paid to their bank account) or Reinvest (distributions automatically reinvested)
The preference is stored on the allocation request and automatically applied when units are issued
Via the Admin App:
When creating an allocation request on behalf of an investor, admins can select the investor's distribution preference
The preference follows the same options: Direct Credit or Reinvest
Note: Whenever units are issued, Caruso prefills the latest investor preference from the relevant allocation request. For additional investments into an existing holding, the new preference will override any previous reinvestment setting on that holding.
Managing Reinvestment Settings on Holdings
Once a holding is created, you can configure the investor's distribution settings at any time.
To update distribution settings:
In the navigation pane, select Investing Entities
Select the relevant investing entity
Go to the Holdings tab
Click the ellipsis (...) next to the holding and select Update Holding Settings
Available settings:
Distribution bank account – The bank account where distributions will be paid
Redemption bank account - The bank account where redemptions will be paid
Distribution settings – Enable or disable distributions for this holding
If enabled, reinvestment settings become available:
Reinvestment: No – Distributions are paid out to the bank account
Reinvestment: Yes – Distributions are automatically reinvested
When set to Yes, you must select which unit class reinvestments will be issued into
Note: Investors can view their distribution settings in the Investor Portal but cannot change them. Any changes must be made by the fund manager.
How investors view their distribution settings:
Click their profile name in the top right corner
Select Investing Entity Settings
Open the Distributions tab
Managing Distributions
Reinvestments are processed seamlessly as part of managing distributions. For more details, please refer to the Managing Distributions guide.
Note: For distributions that include reinvestments, the following steps are enhanced:
Creating a distribution: No change; Caruso automatically calculates distributions and reinvestments for holdings set to reinvest.
Previewing a distribution: Displays the total number of holdings with reinvestment enabled and each holding’s reinvestment setting.
Reports: Use the Reinvestment report to view details of distributions being reinvested.
Confirming a distribution: Shows the total number of holdings reinvested and the total reinvested amount. You will be prompted to select the date of issuance.
If you have any questions or need assistance, please contact our Caruso Support team either by email or live chat.