Carry allocation quoted in DAW vs. bps -- Any difference?
I'm not sure if there's an implied difference between the two -- for example, is DAW a fixed dollar amount regardless of fund performance with no upside or does it actually back into a certain number of bps in the overall fund?
Calculates back into bps but you need to understand what CoC the DAW is calculated on
This is right. $2M DAW translates to 25bps of a $4B fund at 2x CoC. Simple math for carry pool is $4B * 2x - $4B * 20%.
Quoting DAW makes it easier to conceptualize when fundraising target is less certain. In the example above, your economics would be the same (and bps would just adjust) if the fund were $8B instead.
CoC, DAW, Bps
Are these sex terms?
If so I need to know
CoC = Cash on cash return (distributions received divided by cash contributed. Also called 'MOIC')
DAW = Dollars at work (How do carry dollars at work translate into annual compensation? | Wall Street Oasis - good explanation)
Bps = basis points, used when talking about interest rates, carry allocations, etc. (Basis Points (BPS) Definition (investopedia.com))
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