easy · Private Equity
A fund uses an American waterfall. Deal A returns a $50M profit, and Deal B results in a $30M loss.
If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventually liquidates with a total profit of only $20M, what mechanism ensures the GP returns the excess funds?
- Clawback
- GP Catch-up
- European Waterfall
- Preferred Return
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