Accruing Pref to Match XIRR
Bit of an in the weeds question, but has anyone successfully built a waterfall where they were able to accrue pref at a given tier to exactly match what XIRR spits out?
I'm currently running a waterfall with an 8.25% hurdle where pref is accrued on a daily basis and hits the capital account on the first day of the month, so using a January 1 accrual date as an example, the logic for the accrual schedule is (Beg. Bal * ((1.0825)^(31/365)-1)). The issue is that after accruing that way, once everything in the capital account is distributed at sale, XIRR is giving me an 8.244%. This results in distribution splits getting fucked since those percentages are being looked up based on what the IRR is...so 1/10 of a bp has wrecked my functionality.
Has anyone had success getting your accrual schedule to marry up w/ XIRR or vice-versa? I'm guessing that the issue is related to accrual days used in each month (something like 360 days vs 365 or including an extra day in each month to account for day-of accrual), but haven't been able to make any changes that worked.