As a GP, what kind of waterfall offer would you turn down from an LP?

So let's say youu had an offer from a major investor, to inject as much capital as you could deploy, into a boutique hotel chain (project sizes roughly $3-4M equity checks per project), deploying about $25M of equity per year.

And the LP says we want: 10% pref 82.5% until 20% IRR 75% until 25% IRR 70% therafter

As well, GP (who has a property management arm) has to subordinate their management fee to the preferred, so that LP gets paid out on their pref first.

GP has to commit all their current holdings to securitize bank loans, so that LP knows GP's interests are 100% aligned and that they will be 100% incentivized to make it work.

GP needs to invest the majority of their liquid net worth in the venture.

So what would you say if you had this offer, from one of the world's leading financial institutions, ready to take out your funding needs permanently?

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