medium · Private Credit & Debt fund-structures-returns-economics
A private debt fund is leveraged 1.0× equity (Gross Assets = $1,000M, Equity = $500M). The portfolio yield is 10.0%, and the cost of fund-level borrowing is 6.0%.
If the portfolio experiences a 2.0% realized loss on gross assets, what is the net return on equity before fees?
- 8.0%
- 10.0%
- 12.0%
- 14.0%
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