What is more common practice for preferred returns?
I'm working on a GP deal for my firm and in this deal the preferred return is paid out quarterly, but then it is based on the quarterly equity balance rather than the the start of the year balance, making the yearly pref return lower.
Is it more common to see preferred return based on a start of the year balance so that the full year is getting the 8-10% or on a quarterly basis, which lowers the real pref return below the 8-10%?
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