Total carry for gp with and without catch-up

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Suppose Fund III has $250M in committed capital with 25% carried interest and carry basis of all committed capital. Priority return of 10% with 100% catch-up. Suppose all committed capital is drawn down on first day of fund. Total exit proceeds of $320M. Suppose also that $275M of these proceeds come at end of year 1, $15M in year 2 and remainder in year 3.

a) How much will LP and GP receive in each of year 1, 2 and 3.

b) Compare the total carry for GP with and without catch-up.

c) Suppose proceeds for this fund were $300 with $250 disbursed in year 1, $35M in year 2 and $15M in year 3. What would LP receive in each year with and without catch-up?

Reference no: EM131360391

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