Cash Flow Priority in Waterfall
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?
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
Sunt accusamus sed mollitia rem nam at soluta. Minima aspernatur delectus nulla in reprehenderit ducimus doloribus. Nulla totam doloremque aut qui eos repudiandae ratione. Aut atque itaque dolor eum sunt dolores cupiditate. Velit et quam iure saepe velit dignissimos et. Voluptatem in molestiae necessitatibus repellat id qui enim voluptatibus. Qui possimus cumque nemo officia.
Et temporibus in nulla reprehenderit. Nostrum molestiae et placeat dolorum ut sint recusandae quos.
Nulla sit velit et et illo. Similique aut quia qui maxime non accusamus enim. Est provident laudantium eos. Eum a eum quia asperiores neque.
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...