Lookthrough Decomposition

How LP interests are decomposed into per-company exposure via Delaware Series LLCs, NAV attribution, and the Position Object schema.

Overview

Lookthrough decomposition is the process of breaking a single LP interest into per-company exposure — enabling the holder to sell, pledge, or transfer exposure to individual portfolio companies without selling the entire LP stake.

This is Level 5 (Decomposed) on the brownfield fidelity spectrum. It is the most ambitious onboarding pattern and the most valuable for liquidity creation.

The mechanism: Delaware Series LLC

Under 6 Del. C. section 18-215, a Series LLC allows creation of unlimited protected series within a single master LLC. Each series:

Has separate members, managers, and operating agreement provisions
Has segregated assets and liabilities
Can sue and be sued in its own name
Requires no additional state filing, franchise tax, or registered agent

The cost structure is transformative. At 100 series (100 underlying portfolio companies), the marginal cost per series approaches zero versus $90+ per standalone LLC.

How it maps to the Position Object

An LP holds a $2M commitment in Fund III, which has 10 portfolio companies. After brownfield wrapping:

Fund III (10 portfolio companies)
  └─ LP Interest (Jane, $2M commitment, $1.4M called)
       └─ AV Fund III — Jane, LLC (Series LLC wrapper)
            ├─ Series A → Company Alpha ($300K NAV)
            ├─ Series B → Company Beta ($250K NAV)
            ├─ Series C → Company Gamma ($180K NAV)
            ├─ ...
            └─ Series J → Company Kappa ($90K NAV)

Each series is a Position Object:

Field	Value
`entity_id`	`av-fund3-jane-series-a`
`asset.vehicle_class`	`doiv_lp_interest`
`asset.issuer.name`	`AV Fund III — Jane, LLC — Series A`
`asset.underlying.company`	`Company Alpha`
`economic_rights.sharing_percentage`	Pro-rata share of Fund III's Alpha position
`valuation.current_mark`	Derived from latest NAV report
`provenance.acquired_via`	`contribution`
`provenance.brownfield_source`	Original LP interest lineage

Jane can now:

Sell her Company Alpha exposure without selling her entire LP stake
Pledge her Company Beta exposure as collateral for a Factor Prime loan
Hold her Company Gamma exposure to maturity

The fund GP still controls the underlying assets. Jane's series units represent economic exposure, not direct ownership of portfolio companies. GP consent is still required for unit transfers (encoded in the consent chain).

NAV attribution

The core computation: given a fund-level NAV report and a series-to-company mapping, determine what each series is worth.

Real fund admin reports (Juniper Square, Allvue, eFront) include fields beyond simple fair value:

Field	Why it matters
`cost_basis`	Original investment amount per company
`fair_value`	Current mark per company
`unrealized_gain_loss`	Drives mark-to-market on series units
`unfunded_commitment`	Future capital call exposure per series
`distributions_to_date`	Required for waterfall replay and DPI calculation

The NAV attribution function maps fund-level data to series-level valuations. When the fund marks up Company Alpha, Series A units appreciate. When the fund distributes proceeds from Company Beta, Series B holders receive their pro-rata share.

ℹ NAV report frequency

Most fund admins produce quarterly NAV reports. Some provide monthly or even real-time marks for liquid positions. The attribution engine supports any frequency — each NAV report triggers a position.mark_updated event for affected series.

Rebalancing events

Fund-level changes propagate to series positions:

New investment: the fund invests in Company Lambda. A new series is created, and existing series' sharing_percentage values are recalculated.
Exit: the fund exits Company Beta. Series B positions are marked to the exit price, distribution events are generated, and the series transitions to exited status.
Mark change: the fund admin updates Company Alpha's fair value. Series A's valuation.current_mark is updated and a position.mark_updated event is emitted.
Capital call: the fund calls additional capital. Each series' unfunded commitment allocation is updated.

Distribution waterfall

When the fund distributes, proceeds flow through the SPV to series holders:

Fund distributes to the SPV (as LP of record)
SPV allocates to series based on the source of the distribution (which portfolio company generated the proceeds)
Series holders receive their pro-rata share
Distribution events are recorded in the event log with full waterfall detail

For GP stake decomposition (Pattern 3), the waterfall is more complex: carry distributions flow through the carry structure, management fee distributions flow separately, and clawback provisions may affect both.

When to use lookthrough decomposition

Lookthrough decomposition (L5) adds significant value when:

The LP wants to sell exposure to specific portfolio companies
A lender wants to collateralize specific underlying positions rather than the blended LP interest
The holder wants different treatment for different underlying exposures (hold some, sell others, pledge others)

It adds unnecessary complexity when:

The LP plans to hold the entire interest to maturity
The fund has few portfolio companies (< 5)
The fund is near end of life and positions are being exited

A position can always start at L4 (standard LLC wrap) and convert to L5 (Series LLC) later. The decision does not need to be made at onboarding time.

Brownfield Onboarding — The fidelity spectrum and three onboarding patterns
Decomposability — Structural vs economic decomposition
Encumbrances — Collateral encoding and UCC Article 9 perfection
Position Object — Schema structure and vehicle class variations

Lookthrough Decomposition

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