Building out a private equity fund model and for some reason or another hit a roadblock:
1 - Have to figure out the capital accounts (beg balance, end balance, changes) to calculate management fees, expenses, etc.
2 - The ending annual capital balance is based partly on any return of capital to the GPs or LPs.
3 - However, to calculate the return of capital (first step in the waterfall) you need to model out all the cash flows, fees and expenses).
I maxed out the iterations already but the formulas blow up when I increase the size of the fund (which of course flows through the entire model).
Anyway to get around this inherent circular reference...or am I just retarded?
Thanks for the help guys.
Turn off the automatic iteration, I believe you go to excel options and it's somewhere under calculations. Switch to manual calculation (F9), hope this helps.
What I do is use previous year's outstanding debt to calculate current year interest payment to get rid of the circular reference.
wiggityWACC - Did you ever find a solution for this? I am running into the same problem. So much of the income statement is based on the balance sheet (which also moves continuously), I feel that Excel is reaching it's circular reference / iteration limit. Or I might be retarded. Do you have any advice here? Thanks!
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