In practice
KYC documents are usually collected with the subscription agreement, and the administrator often runs the checks. Entity investors must identify their beneficial owners, and sanctions screening is typically part of the process. Checks are repeated or refreshed over the fund’s life, and the required depth varies with investor type and the investor’s home jurisdiction.
An example
Round numbers, not a real fundSay a new investor wants to commit $20 million. The fund’s administrator asks for identity documents, ownership details and the source of funds before accepting the commitment.
Why it matters
Funds and administrators must do it for every investor, so onboarding and each new investor’s paperwork can take weeks.
A definition, not advice; where usage varies the entry says so. Something wrong? Tell the desk.