I know everybody says that Waterfalls significantly very depending on structure and partner but is it typical to have promote paid before return of capital?
I generally always thought that LPs should expect return of capital, then a pref, Then back to splits before hitting a hurdle and promoting the GP.
How have you seen it work before?
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Haven’t seen this structure…would think that instead of this promote, it would be in the form of an upfront fee to GP
I was thinking the same thing. Either some other kind of see where the GP gets there juice, or alternatively I’ve also seen where a promo will accrue and be paid out at reversion.
Yeah, I mean for a development deal. I can see a negotiation on a land contribution by GP at x% accrual rate paid out at reversion. However, still a fixed % rather than a promote with some form of clawback/payment restrictions if the deal goes south
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