WHY I DIDN’T FUND A CAPITAL CALL—AND WHAT I DID INSTEAD

Hey Everyone,

I recently made a decision that I think more investors should talk about.

One of the deals I’m in issued a capital call earlier this year. Not a huge one—just a percentage of the original investment. And I chose not to fund it.

This wasn’t about lack of liquidity or losing faith in the sponsor. It came down to one thing:

I had a better place to put that money.

Here’s how I thought about it:

When I looked at the deal’s performance, it wasn’t distributing cash flow, and the overall returns were trending below original projections. There was nothing urgent or accretive about the capital call—it was more about plugging gaps than creating new upside.

So I asked myself a simple question:

“What is the best use of this capital right now?”

For me, the answer was clear: private lending.

Through 42 Solutions, I’ve been deploying capital into short-term, real estate-backed loans that pay fixed, double-digit returns.

I get monthly income

I maintain control over the deal structure

And I’m first in line in the capital stack

Instead of putting more money into a struggling equity deal, I deployed that same capital into a position that pays me like clockwork and is backed by collateral I can touch

This wasn’t just a better return—it was a better risk.

A lot of investors assume that once they commit to a deal, they need to follow through with every capital call. But that’s not true.

Every capital call is a new decision.

And sometimes, the right move is to say no—especially if the return profile doesn’t beat your alternatives.

What this means for you:

Before funding a capital call, ask yourself:

Is the deal performing at or above expectations?

Will this contribution generate meaningful upside?

What would this capital earn elsewhere—if I controlled it directly?

If the answer to that last question is stronger than the deal you’re being asked to fund… it’s okay to sit it out.

Bottom Line:

I didn’t fund the capital call because it didn’t align with my goals. I chose control, cash flow, and capital efficiency instead. That’s how you build long-term wealth—not by staying blindly committed, but by staying relentlessly focused on performance.

Let’s keep making moves with purpose.

DK 💰