Hi - this is probably going to be a basic question but I'm struggling to understand catch up calculations so wanted to ask if someone could walk through the following example. LP commits £100m to a fund. Fund has a management fee of 0.7% on invested capital, performance fee of 7.5% over a hurdle of 5% with 100% catch up. What would the total fee load be for total returns at 5% ,6%, 7% and 8%? How would the fee loads change if the catch up was 25%? Thanks

My understanding is that LPAs are drafted so carry calculations are on contributed capital by an LP. Contributed capital includes management fees + fund expenses + established expenses + investment cost. Once the fund clears the 5% hurdle there will be 100% catch up to the GP until the GP has been paid 7.5% carry.

Catch up calculation

franco

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Catch up calculation

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