Fund A has 1.5x Gross MOIC but 30% IRR.
Fund B has 2.0 Gross MOIC but 20% IRR.
Fund B will have a higher carried interest pool. But, I would assume the 30% IRR is due to faster realizations (leading to higher IRR) -- does this potentially lead to faster carry payments under the European waterfall style?
| +26 | VP Level - when to follow up after final round | 10 | 1d | |
| +25 | Sr Asso / VP Unemployment Check-in | 7 | 1h | |
| +20 | Vista Lateral Associate | 12 | 11h | |
| +16 | IB/PE Lifers, Was It Worth It? | 5 | 1d | |
| +15 | Anyone here work at 777? | 15 | 7h | |
| +14 | EBITDA walkdown to cash flow for debt service | 10 | 5d | |
| +14 | Why is Blackstone so dominant? | 9 | 3d | |
| +14 | Boss says one thing and does another | 7 | 12h | |
| +13 | Public company LBO | 4 | 11h | |
| +12 | Late to the PE Recruiting Where Do I Even Start | 2 | 5d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Assuming the same fund size, obviously the fund with a higher MOIC will have a larger carry pool…
yeah, I just rephrased the question. but the higher IRR likely means faster realizations. So would carry be paid out faster in this case?
bump
Always focus on MOIC
Higher IRR doesn't mean quicker distributions, it can mean a number of things IRR is easily manipulated. Some GP's have left things on a subscription line for 2-3 years, with current rates it kills net returns but the last few years it was free money. It could also just mean the GP writes things up immediately/aggressively.
If you want to evaluate distributions look at DPI
Aut voluptatum quae error. Optio incidunt unde libero sed. Natus labore omnis et sunt eum aperiam. Perspiciatis eos facere quam omnis voluptates ut.
Voluptatum ducimus nihil non modi assumenda ut eaque. Occaecati dignissimos nesciunt sed temporibus et qui dolorem. Culpa error deleniti iusto nihil. Et vel sed magni molestiae qui iure beatae.
Et et quia magnam. Rerum possimus fugit quasi ut a repudiandae.
Quam et omnis animi sunt. Inventore impedit corporis ut est vero consequatur. Aut placeat dolor facilis nulla. Magnam assumenda ut et.
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...