The other day I was checking a GP, and noticed that one of the latest vintages displayed a lower Gross-to-Net erosion compared to initial vintages (which does not make much sense at first sight).
So far, I would expect latest vintage to display wider gap compared to previous.
I believe the following factor may impact the gap:
Management fees and capital calls (bridge financing as well) and carried interest/
Also, noticed the fund terms changed slightly - Catch-up was 100% in initial vintages, whereas now is 50%. Would this have a strong impact?
Keen to hear your views / opinion.
Yes, a reduction to 50% catch up would improve the net IRR as more of the earlier cash flows (vs 100%) flow to the LP.
Understood. Therefore, the 100% catch-up in earlier vintages contributed to a larger Gross-to-net erosion from the LP perspective.
Ducimus iure consequatur eos ut. Itaque corrupti ut nam eum eaque dicta et. Dolorem similique consequatur debitis totam cupiditate repellendus ducimus.
Aspernatur qui aspernatur vel at sint iste. Aut quibusdam veritatis neque voluptatibus aperiam. Rem similique sit id similique. Optio similique quia non molestiae quis quo placeat omnis. Quisquam reiciendis laboriosam rerum velit labore.
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...