Definition
Allocation
The final amount of an SPV each LP is awarded, once commitments are reconciled against the available room.
An allocation is the share of an SPV a limited partner actually receives, as opposed to the amount they asked for. Sponsors are usually working against a fixed allocation from the portfolio company, so when a deal is oversubscribed the sponsor has to cut commitments down to fit: pro rata, by priority to earlier or larger cheques, or at their discretion under the operating agreement. Allocations stay provisional until the close, so an LP who misses KYC or fails to wire can be reduced or removed and that room reallocated. The number drives every figure downstream of it, including capital account, carry and distributions, which makes allocation the step sponsors most often get wrong when tracking a raise in a spreadsheet.