Trying to figure out if this is timing, fees I missed in the PPM, or something else. Fund is a closed-end bridge vehicle, 3-year term, I'm in for $50k. Manager said the gap was "accrued interest not yet received" but that feels like a lot to just wave off.
That 2.3-point gap on a $50k ticket is like $1,150 walking out the door, not nothing.
The "accrued not yet received" line is real but it should not be 2+ points wide on a bridge fund with short-duration loans, that's the part worth pushing on. Bridge loans typically roll every 6-18 months so the lag between accrual and cash receipt should be narrow, not a full year of it sitting in limbo. Ask them for the loan-level schedule showing what's accrued versus what's actually been collected in cash, any fund that won't hand that over fast is a yellow flag. I had a similar situation in a Houston-based fund in 2021 where the manager blamed timing but the real issue was two loans quietly in default that weren't being marked down yet, accrual accounting can mask that for a long time.
Ask for the waterfall schedule and compare it line by line against your K-1 box 1.
That explanation from the manager could be legitimate on a bridge fund specifically, because short-term loans that haven't matured yet can sit in accrued status for the whole reporting period and only hit distributable cash at payoff. But 2.3 points is a lot to be sitting in that bucket if the fund is already two years into a three-year term. At that stage most of your loans should be seasoned enough that you're seeing real cash, not paper returns. I'd want to pull the actual loan-level schedule, not just take the fund-level number, and see how many underlying loans are still in their interest reserve phase versus actually paying current. The thing I'd want to know before I let this go: what percentage of the portfolio by balance is past its expected payoff date?
Had a bridge fund quote me 8.4% net, K-1 came in at 5.9% two years running.
Mine was fees buried in the "organizational expenses" bucket, PPM page 47, easy to miss. Cost me roughly $1,200 I never got back on a similar-sized ticket. Ask specifically whether management fees are calculated on committed or deployed capital, because that gap alone can eat 1.5 points if you're not fully deployed yet.
