The exact allocation depends on the Limited Partnership Agreement (LPA) of course, but is there one of the two options that occurs most often?
Recycled provisions can be used for both new and follow-on investments, depending on the terms set in the Limited Partnership Agreement (LPA). However, they are often used for follow-on investments to support existing portfolio companies through subsequent funding rounds. This approach helps maintain or increase the fund's stake in promising companies. The specific allocation will depend on the fund's strategy and the LPA's guidelines.