An unfunded commitment is the part of an investor's commitment to a fund that the manager has not yet called. The manager draws it over the fund's life as it needs money, so investors must keep cash ready, and a buyer of the stake takes it on.
What the video says
In private markets, an investor commits a hundred million to a fund, and sixty has been called. What could it still be asked for? Three. Two. One. Forty million. It's called the unfunded commitment. The manager calls that forty million as the fund needs money. Some of it may never be called. So why do investors care? They have to keep cash ready for it. And if they sell the stake, the buyer takes it on. Committed isn't the same as paid in.
A simple example with round numbers, not advice. Terms vary by fund.
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