Reinvestment lets investors have their distributions automatically reinvested into their holding rather than paid out. Fund managers configure which funds support reinvestments by setting up each capital raise to show or hide reinvestment preferences on applications. From there, if reinvestments are supported, investors state their preference when they first apply to invest, admins review checks and alerts when creating applications and issuing units, and the distribution controls when and at what price reinvested units are issued.
Enabling Reinvestment Preference Collection on a Capital Raise
Whether reinvestment preferences are collected on applications is controlled per capital raise and is off by default.
In the navigation pane, select Capital Raises
Create a new capital raise, or open an existing one and go to its Settings
Set the collect reinvestment preference setting to Yes or No
This setting drives whether the preference is shown on the application form in both the investor portal and the admin app:
Yes - investors are asked for their preference during their application, and admins can set it when creating or editing an application
No - investors are not asked, and on the admin application form the Reinvestment and Reinvestment class fields show as read-only N/A. The application carries no reinvestment setting, and any existing holding keeps its current setting.
Note: The default is No, which keeps the existing application flow. When set to No, distributions are paid out as normal unless a holding is set to reinvest directly.
How Investors Set Their Preference in the Investor Portal
When distribution reinvestment is enabled on the capital raise, investors see an additional step called Distribution while completing their application.
Investors are asked: "Please confirm your preferred method for receiving distributions:"
They choose one of two options:
Direct Credit (default) - distributions are paid out to their bank account
Reinvest - distributions are automatically reinvested into their holding
The preference is saved on the application when they submit it
Note: In the investor portal, investors only choose whether or not to reinvest. Selecting the unit class the distributions are reinvested into is available in the admin app.
Setting the Preference in the Admin App
When creating an application on behalf of an investor, admins can record the investor's preference directly.
In the navigation pane, select Capital Raises
Select the relevant capital raise
Click Create application
In the application form, set the distribution preference to Direct Credit or Reinvest
If Reinvest is selected, choose the Reinvestment class - the unit class the distributions are reinvested into, selected from the available classes in the same fund
The same options are available when editing an application.
Note: If the capital raise is not set to collect reinvestment preferences, the Reinvestment and Reinvestment class fields show as read-only N/A and cannot be set on the application.
Viewing and Editing the Preference
Throughout the application lifecycle, admins can:
View the investor's reinvestment preference on the application
Edit the preference at any point before units are issued
Reinvestment Checks and Alerts
Caruso runs a reinvestment holding check when you create or edit an application, and again when you review a draft unit issuance batch. The alerts are informational: they highlight where an application and an existing holding are not aligned, but they never change the holding.
❗Issuance never overrides a holding's reinvestment setting. An existing holding's setting is never changed by an application, a unit issuance, or a batch. Caruso surfaces the alerts below to highlight when settings are not aligned, but any difference must be updated on the holding itself, so the change is tracked in the audit log rather than applied as a silent overwrite.
When creating or editing an application (reinvestments enabled)
Caruso checks the application's reinvestment setting against any existing holding for the investing entity in the same unit class, and shows one of the following alerts:
ℹ️ No existing holding found - there is no existing holding for this class. If units are issued, the new holding takes the application's setting.
ℹ️ Reinvestment setting match - the existing holding and application setting match. No change is made.
⚠️ Reinvestment setting mismatch - the existing holding and application settings differ. Unit issuance will not update the existing setting. Please update the holding setting directly if required.
When creating or editing an application (reinvestments disabled)
The Reinvestment and Reinvestment class fields show as read-only N/A, and where an existing holding is found the following alert is shown:
⚠️ This capital raise is not set to capture reinvestment preferences. Unit issuance will not update the existing holding setting. Please update the holding setting directly if required.
When reviewing a draft unit issuance batch
If one or more applications differ from an existing holding's setting, a non-blocking alert is shown. You can review the applications and proceed - the holdings keep their existing settings.
⚠️ Reinvestment setting mismatch - the existing holding and application settings differ for X applications. Unit issuance will not update the existing settings. Please update the holding setting directly if required.
What Happens When Units Are Issued
When units are issued against an application:
New holding - the holding is created with the application's reinvestment setting
Existing holding (top-up) - the holding keeps its current reinvestment setting. The application's setting is never applied over it, and where the capital raise does not collect preferences, no default is written either. Any difference is surfaced through the alerts above, never applied silently.
Note: To change a holding's reinvestment setting, whether before or after issuance, update the holding directly (see Managing Reinvestment Settings on Holdings below). This ensures the change is tracked in the audit log.
Managing Reinvestment Settings on Holdings
Administrators can adjust an investor's distribution settings at any time:
In the navigation pane, select Investing Entities
Select the relevant investing entity and go to the Holdings tab
Click the ellipsis (...) next to the holding and select Update Holding Settings
Available settings include the distribution bank account, the redemption bank account, and whether distributions are reinvested. When reinvestment is 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.
Managing Reinvestments on a Distribution
If any holdings in the fund are set to reinvest, the distribution controls when and at what price the reinvested units are issued. When creating or editing a draft distribution, complete the Reinvestment section:
Date of Issuance - the date the reinvested units are issued
Reinvestment Pricing Date - the date used to price the reinvested units
Transaction Tags (optional) - tags applied to the reinvestment unit issuance transactions
Reinvestment Price
Reinvested units are priced using the Reinvestment Price, a dedicated pricing type set per unit class alongside the Issuance Price and Redemption Price. Each unit class holds its own effective-dated list of reinvestment prices, and the price applied to the distribution is the unit class's reinvestment price in effect on the chosen Reinvestment Pricing Date.
To maintain reinvestment prices:
Open the unit class (see Create and Manage Unit Classes)
Go to the Reinvestment Price tab
Select Update reinvestment price to add a new effective-dated price
Note: If no reinvestment price exists for the chosen pricing date, the draft distribution shows a warning and cannot be confirmed. Add a reinvestment price for the unit class, or change the pricing date, before confirming.
Current Limitations
Distribution reinvestment works best on funds where the entire net distribution can be reinvested without loss. Where the reinvested amount cannot convert into exact whole units, Caruso:
Displays a warning showing the total rounding difference
Includes the reinvestment details in the reinvestment report
Allows administrators to acknowledge the impact and proceed
Note: The rounding warning only appears when there is a difference greater than $0.
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If you have any questions or need assistance, please contact our Caruso Support team either by email or live chat.