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Fund terms visualized

Management fees, hurdle rates and carried interest waterfalls; a visual guide to economic fund terms today.

How to model front-loaded preferred return in American-style waterfalls

The model, which effectively marries a European-style preferred return concept with an American-style return of capital calculation, can serve to ensure equitable compensation of both LPs and GPs, writes Timothy Eberle of Citco Fund Services.

Partners Group embraces longer holding periods

The firm joins the likes of KKR, CVC and BlackRock in targeting long-term cashflows from market-leading companies.

The holy trinity of terms: preferred return

In the final instalment of a three-part series, long-time limited partner turned consultant Ray Maxwell reflects on shortcomings of the hurdle rate in private equity and proposes an alternative.

The holy trinity of terms: management fees

Long-time limited partner turned consultant Ray Maxwell says private equity should benefit from either significant carried interest or high fees – but not both.

Why lawyers are urging lenders to get aggressive

With documentation strongly in favor of borrowers, financiers are being told to look for excuses to redress the balance of power.

Notes on a hurdle

For all the debate it provokes, the conventional hurdle rate has remained stubbornly untouched since the ’80s.

The holy trinity of terms: carried interest

Long-time limited partner turned consultant Ray Maxwell reflects on the three key economic terms at the heart of the relationship between manager and investor, starting with carry.

The seven problems with carried interest allocation

Simon Havers of executive search firm Odgers Berndtson details why carried interest allocation is not smooth sailing.

Three approaches to calculate waterfall in private equity systems

Consultant Gert-Tom Draisma lays out the options in the extract from The Definitive Guide to Carried Interest.

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