hard · Private Equity
A fund using an American (deal-by-deal) waterfall exits Deal 1 at a $50M profit and pays $10M in carry to the GP. Later, Deal 2 exits at a $30M loss. At the end of the fund's life, there are no other profits or losses.
If the fund has a 20% carry entitlement on total profits, how much must the GP return via the clawback?
- $6M
- $0
- $10M
- $4M
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