medium · Private Equity & LBOs

Which of the following scenarios would most likely trigger a 'Clawback' provision in a private equity fund?

1. The management fee charged for the current year exceeds the fund's total realized capital gains to date.
2. A single portfolio company declares Chapter 11 bankruptcy within twelve months of the original acquisition closing.
3. The GP fails to deploy at least 80% of the fund's committed capital within the first five years of the investment period.
4. The GP receives carry on early successful exits, but later losses reduce total fund profit below the hurdle.

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