medium · Private Credit fund-structures-returns-economics
Fund Alpha has a gross asset yield of 10.5% and utilizes fund-level leverage at a ratio of L = 1.0x (debt-to-equity).
If the all-in cost of borrowing is 6.5%, what is the fund's gross return on equity (R_E) before management fees and credit losses?
- 14.5%
- 17.0%
- 10.5%
- 12.5%
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