Distribution Waterfall Stages, Commitment & Unfunded Commitment in Private Equity
Commitment is the promising amount by Investors towards the fund. In private equity, “committed capital” refers to the pledge of a capital contribution to a given fund by an investor.
Unfunded Commitment is the portion of commitment which is not called by fund manager.
Private equity waterfall distribution model -
Return of capital – All money received from Investors should be return.
• Preferred Return – Assumes Investor would have earned Income had money Invested elsewhere. Typically, 8% can be compounding.
• GP Catch up – 50% of amounts distributed to GP, 50% to L.P. with no more than 20% of total profits going to the GP
• 80-20 Split – 80% of profits to LP and 20 % to GP. If waterfall reaches to this level, GP receiving 20% of all profits.
Capital Call - • Capital Call in Fund Accounting
Distribution - • Distribution in Private Equity
Distribution waterfall calculation - • Private Equity Waterfall Calculation | Ret...
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