medium · Private Equity
A PE fund with an 8% compounded preferred return and a 100% GP catch-up mechanism has distributed $100M of profit to LPs.
According to the standard catch-up formula, how much must the GP receive in Tier 3 (Catch-up) to achieve its 20% share of total profits?
- $20M
- $16M
- $25M
- $8M
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