medium · Private Credit & Debt fund-structures-returns-economics
A fund's Limited Partnership Agreement (LPA) defines a 20% incentive fee with a 100% catch-up after an 8% preferred return.
If the fund has $100,000,000 in capital and earns $10,000,000 in profit, how much is distributed to the GP via the catch-up layer specifically?
- $1,600,000
- $400,000
- $2,000,000
- $2,500,000
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