Description

Carried Interest and Promote Modeling addresses the profit-sharing arrangement for a fund sponsor within a limited partnership agreement. This playlist focuses on the carried interest calculation, promoted interest, or “promotes”, for real estate transactions, and the distribution waterfall to both GPs and LPs resulting from these arrangements. We will look at various calculations involving these topics and use traditional return metrics used to compare them, including IRR, MoM, and splits.

Learning Objectives

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1. Recall the features and functions of carried interest and promote modeling.
2. Calculate management fees.
3. Calculate pari passu preferred return.
4. Calculate preferred return and promoted interest in real estate transactions.
5. Calculate preferred return with a cathcup provision.
6. Recognize the impact of annual distributions on returns.
7. Use traditional return metrics, including IRR, MoM, and splits.