easy · Private Equity pe-core
A $500M fund uses a 'Subscription Credit Line' to bridge its capital calls. It buys an asset for $50M in Year 1 using the credit line and only calls the capital from LPs in Year 2 to repay the bank.
What is the most likely impact of this maneuver on the fund's reported performance metrics?
- Lower IRR, lower MoIC
- No change to either metric
- Higher IRR, same MoIC
- Higher MoIC, same IRR
Sign up free to see the explanation and track your rank →
More Private Equity pe-core practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- What is the company's Interest Coverage Ratio?