medium · Investment Banking ma-lbo
In the context of Private Equity, what is the 'Preferred Return' or 'Hurdle Rate' typically associated with?
- The minimum IRR that Limited Partners must receive before the General Partner earns carried interest
- The maximum MOIC that regulators permit funds to disclose to prospective Limited Partners
- The discount rate, typically the WACC, used to calculate Enterprise Value for a target within a DCF
- The contractual interest rate paid on Senior Secured Bank Debt within a capital structure, unrelated to fund returns
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