medium · Private Equity
Alpha Capital is calculating the 'GP Catch-up' for its latest fund, which features a 20% carry structure and an 8% hurdle rate. An LP has just received its $100M initial capital plus the $8M preferred return.
According to the standard distribution waterfall, how much must be distributed to the GP during the catch-up phase before profits are split 80/20?
- $20M
- $2M
- $2.5M
- $1.6M
Sign up free to see the explanation and track your rank →
More Private Equity practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- What is the company's Interest Coverage Ratio?