Waterfall Model with hurdle based on dollar amount ?
I'm trying to create a waterfall model as follows:
"1st Hurdle":
LP receives 100% of cash flow UNTIL LP has received their initial investment amount.
**After 1st hurdle has been "unlocked" the distributions will go as follows below**
"2nd Hurdle":
5.5% Cash-on-Cash Pref
PRE-PREF = GP/LP distributed pari pasu of their initial equity investment %'s
POST-PREF = GP/LP distributed 40/60
I've never had experience with a model that used a fixed dollar amount to "unlock" the pref hurdles. Any help would be greatly appreciated !!
Could have if statement in the cashflow waterfall saying if sum of current/previous cash flows is less than initial investment then 100% of cash flow to LP otherwise initial investment minus previous cash flows to LP. Doesn’t seem too complicated, not sure what the issue is
Thanks, I got it now. I guess I was just over thinking it
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