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?
| +43 | Nadeem OUT At Blackstone - What Now? | 31 | 7h |
| +28 | Anyone Actually Outsourcing Underwriting / Asset Management? | 7 | 7h |
| +23 | SWF/Pension Funds in RE | 3 | 3d |
| +13 | PGIM Real Estate Equity Opinions? | 9 | 2h |
| +13 | CRE Credit → Capital Markets | 2 | 1d |
| +11 | Development vs. REPE pay gap | 5 | 8h |
| +9 | To the veterans: What was institutional dev actually like during the last bull run? | 0 | 3h |
| +7 | REPE AM Modelling Test / Case Studies? | 2 | 3d |
| +7 | PRE MBA IB back to IB | 4 | 8h |
| +6 | JD/LLM career path to REPE advice | 1 | 3d |
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.
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
Nemo corrupti eaque inventore cum dignissimos. Dignissimos sequi illum ipsum vel et. Ullam quibusdam et in dolores quas.
Vitae esse et sit molestias inventore vitae. Aut sunt commodi qui. Non cum repellendus culpa optio delectus est sint impedit. Ipsam omnis quis velit sint est sint.
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...