hard · Private Equity & LBOs
A fund uses a 'deal-by-deal' American waterfall. It exits Investment A for a $50M profit and pays theGP20% carry ($10M). Investment B later results in a $40M loss.
If the total fund profit is now only $10M, how much carry must the GP return to the LP under a standard clawback provision?
- $2M
- $10M
- $8M
- $0
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