hard · Private Equity
A fund's Limited Partnership Agreement (LPA) contains a 'GP Catch-up' provision of 100% and a 20% carried interest. After LPs receive their capital and preferred return, the GP receives the next $10M of distributions.
If this $10M completed the catch-up, what was the total 'Preferred Return' (profit) distributed to LPs immediately prior?
- $10M
- $50M
- $40M
- $80M
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