boltKey takeaways
- The schedule of investments lists a fund's holdings at period end with cost and fair value, grouped by type, industry and geography.
- Under ASC 946, nonregistered funds may present a condensed schedule but must separately identify any investment exceeding 5% of net assets.
- The SOI total must agree to investments on the balance sheet, and each line should trace to the general ledger and to valuation support.
- Fair value hierarchy, valuation technique and unobservable input disclosures in the notes must be consistent with the SOI.
- Build the SOI from tagged ledger data rather than a standalone spreadsheet so it can be regenerated and audited each period.
A schedule of investments (SOI) is the part of a fund's financial statements that lists the investments the fund holds at the reporting date, typically showing each position's description, quantity or principal, cost and fair value, grouped by category. It answers the most basic LP question, what does the fund own and what is it worth, and it ties the balance sheet's single "investments at fair value" line to the underlying portfolio.
For funds reporting under U.S. GAAP, the SOI is a required financial statement under the investment company guidance in ASC 946. Many funds also produce a more detailed, unaudited version for quarterly investor reporting.
What the SOI does#
The SOI serves three audiences at once:
- Auditors use it as the population for testing existence and valuation of investments.
- LPs use it to understand concentration, sector and geographic exposure, and how marks have moved.
- The finance team uses it as a control: if the SOI does not tie to the general ledger and to the valuation package, something is wrong.
Because it is both a disclosure and a reconciliation, it is worth designing the SOI carefully rather than letting it accrete one spreadsheet column at a time.
What U.S. GAAP requires#
ASC 946 sets out the disclosure requirements for investment companies' schedules of investments. In broad terms, a fund should:
- Categorize investments by type (for example, equity, debt, warrants), by industry, and by country or geographic region, showing each category as a percentage of net assets.
- Identify individually each investment in a single issuer whose fair value exceeds 5% of the fund's net assets, with its name, number of shares or principal amount, and fair value. The test considers all of the fund's holdings in that issuer combined.
- Show totals for each category and in aggregate, with the total agreeing to investments on the statement of assets and liabilities.
- Describe key terms for debt instruments, such as interest rate and maturity, and identify restricted or non-income-producing securities where applicable.
Registered investment companies must present a full schedule under SEC rules. Nonregistered private funds may present a condensed schedule, in which positions below the 5% threshold can be aggregated within their category. Many private funds still list every position, either because the portfolio is concentrated enough that most holdings cross 5% or because LPs expect it.
Fair value hierarchy disclosures under ASC 820, including the Level 3 rollforward and quantitative information about significant unobservable inputs, sit in the notes rather than in the SOI itself, but they must agree with it. Confirm the specific presentation requirements for your fund with your auditors.
A sample layout#
A typical audited SOI for a hypothetical growth equity fund might look like this:
| Description | Industry | Country | Shares | Cost | Fair value | % of net assets |
|---|---|---|---|---|---|---|
| Preferred equity | ||||||
| Company A, Series C | Software | United States | 2,400,000 | 18,000,000 | 31,500,000 | 14.6% |
| Company B, Series B | Healthcare services | United States | 5,100,000 | 12,500,000 | 11,000,000 | 5.1% |
| Other preferred equity (4 positions) | Various | Various | 14,200,000 | 16,800,000 | 7.8% | |
| Total preferred equity | 44,700,000 | 59,300,000 | 27.5% | |||
| Common equity | ||||||
| Company C | Industrial technology | Germany | 900,000 | 22,000,000 | 40,700,000 | 18.9% |
| Other common equity (12 positions) | Various | Various | 70,000,000 | 92,000,000 | 42.7% | |
| Total common equity | 92,000,000 | 132,700,000 | 61.6% | |||
| Debt investments | ||||||
| Company D, 10% senior note due 2029 | Consumer | United Kingdom | $8,000,000 principal | 7,850,000 | 7,900,000 | 3.7% |
| Total investments | 144,550,000 | 199,900,000 | 92.8% |
In this example the fund's net assets are about $215.5M, so Company B at $11M just crosses the 5% threshold (about $10.8M) and is listed individually, while smaller positions, none above the threshold, are aggregated, as a condensed schedule permits. A real SOI would also present summaries by industry and geography, either within the schedule or in a supplementary table.
Design decisions worth making early#
Grouping hierarchy#
Decide the primary grouping (instrument type, industry or geography) and keep it consistent across periods. LPs compare SOIs quarter to quarter; reshuffling categories makes that harder and invites questions.
Issuer versus instrument#
A fund may hold several instruments in one company: common, two preferred series, a convertible note and warrants. Present them together under the issuer so the 5% test and concentration analysis are done at the issuer level.
Industry and geography taxonomy#
Pick a classification scheme and document it. Ad hoc labels like "tech" and "software" for similar companies weaken the industry percentages.
Unfunded commitments and other exposures#
If the fund has committed to invest more in a portfolio company or an underlying fund, disclose the unfunded amount. For a fund of funds, the SOI lists underlying fund interests, often valued using the underlying managers' NAV as a practical expedient where permitted.
Building and tying out the SOI#
A reliable SOI comes out of the ledger rather than being typed into a template. A practical sequence:
- Close the investment records. Post all purchases, sales, conversions, stock splits and accrued interest through period end.
- Reconcile positions. Agree share counts and principal amounts to capitalization tables, purchase agreements, loan documents or custodian records.
- Apply approved valuations. Use the fair values approved through the fund's portfolio valuation process, not draft marks.
- Generate from tags. Pull the SOI from GL data tagged by issuer, instrument, industry and country.
- Run tie-outs.
- Total cost equals investments at cost on the trial balance.
- Total fair value equals investments at fair value on the balance sheet.
- Change in unrealized appreciation per the SOI, period over period, adjusted for realizations, equals the amount in the statement of operations.
- Level 3 totals in the fair value note equal the corresponding SOI lines.
- Recompute percentages. Every percentage uses the same net assets figure, and the 5% test is rerun each period.
- Review narrative consistency. The descriptions in the quarterly letter and the SOI should agree on what was bought, sold and written down.
Common errors#
- Stale share counts after a conversion, split or recapitalization at the portfolio company.
- Percentages of total investments instead of net assets. GAAP calls for percentages of net assets; using total investments as the denominator produces figures that do not meet the requirement and can also distort the 5% test.
- Missing the 5% threshold because a position grew during the period and was left in an aggregated line.
- Cost basis drift where return-of-capital distributions from a portfolio company were not applied to reduce cost.
- Mismatched fair values between the SOI and the valuation memo because one was updated after review and the other was not.
Each of these is easy to catch with systematic tie-outs and hard to catch by reading. Auditors will test them; see fund audits for how that testing usually runs.
The SOI in investor reporting#
Quarterly LP reports often extend the SOI with fields that are not required by GAAP but help investors: initial investment date, ownership percentage, gross multiple on invested capital, realized proceeds and a short status note. If you publish an extended version, keep the core columns, cost and fair value, identical to the audited presentation so LPs see one set of numbers. Tracking the same data over time is also the foundation of effective portfolio monitoring.
How Privatis helps#
Privatis keeps investments, valuations and the fund general ledger in one system, so a schedule of investments can be produced from the same tagged positions and approved marks that drive NAV. Investor reports can present the SOI in consistent, ILPA-style formats, and the audit trail records each valuation and position change behind every line.