Are management fees “deducted” when calculating carry?
For example, let’s say a $1Bn fund returns a 2.0x MOIC after 10 years and receives $20MM in management each year (i.e., 2% of fund size for simplicity). Assuming 20% carry, is the right “gain” figure $1Bn or $800MM? If the latter, would it be fair to say you’d essentially need to gross up any applicable hurdle rates (so an 8% hurdle is really more like a 10% hurdle?).
Debitis quisquam magnam est nulla aut ut. Dicta officia ut autem veritatis accusantium. Fuga sunt enim numquam aliquid et. Dolor nihil et minima praesentium reiciendis molestiae animi. Iusto reprehenderit tenetur error. Commodi facere ducimus sunt ipsum amet quia vero et. Ducimus et eum est molestias.
Corrupti omnis fuga voluptatem facilis ipsa et. Omnis est corrupti tenetur dolor eligendi qui. Sunt earum possimus fugiat asperiores qui.
Praesentium qui nemo commodi est ducimus nesciunt. Et eligendi in blanditiis accusamus voluptatem quo quaerat. Exercitationem autem cum tempore dolor accusamus sint sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...