A hard cap is the most a fund's documents allow it to raise. The manager can't go past it without changing the terms.
What the film says
In private equity, investors offer a fund four billion dollars. How much can it take? Three. Two. One. Two and a half, if that's its hard cap. Say the target was two billion. A hard cap is the most the fund's documents allow. So why do investors care? It tells them the fund won't grow past what they signed up for. And hitting it is a sign of demand. A fund can turn away money.
In the glossary: Hard cap
A simple example with round numbers, not advice. Terms vary by fund.
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