Waterfall Model Help

I'm doing a take home case study that includes a waterfall model with 2 hurdles. 10/90 until 10% IRR 20/80 until 20% IRR 30/70 after 20% IRR

There is one large initial funding at time zero, and a handful of small capital calls in later months.

Everything looked good, and when I submitted the MD who's interviewing me he said it was good start, but said to revise and "assume that the Sponsor's original 10% co-invest is part of the LP's tranche in the waterfall."

The only thing I could make this out to mean is to take the initial funding and attribute it all to the LP, leaving the LP with a crazy disproportionate share of the equity invested (the GP would now only contribute 10% of the later capital calls), but keeping the distributions the same, resulting in a wildly high IRR and Equity multiple for the GP.

Is there any other way I could interpret his comment?

Can attach version of the model if needed. EDIT: Models Attached. #1 is model before his comments, #2 is the changes I made in response to his comments

Attachment Size
pre comments 119.23 KB 119.23 KB
post comments 119.45 KB 119.45 KB
8 Comments

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