hard · Private Credit fund-structures-returns-economics
An LBO structure uses a Management Ratchet where management's 10% equity stake increases to 20% if the sponsor achieves ≥ 2.5x MOIC. The sponsor and management together invest 200M (180M sponsor, 20M management).
If the company is sold for 600M of equity value, what is the sponsor's realized MOIC?
- 3.00x
- 2.50x
- 2.67x
- 2.40x
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