Co-GP structure!

yoruba123's picture
Rank: Gorilla | 611

Any one have any insight on co-GP structures? For example, $100M deal with 60% LTV. You go to a PE firm to raise $35M of JV equity and co-GP puts in $5M. How do you structure this amongst the co-GPs? how are fees split? Do you create a hold-co for the co-GPs? how do you structure a win win situation in case one of the co-GPs doesn't execute their responsibility in the business plan? What would the water split look like? thanks in advance!

Comments (3)

Apr 16, 2019

It depends on who does the work and what expertise each party brings to the table. It also matters who is in the best position to negotiate. Its usually some type of split of promote, fees and cash requirements

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Apr 16, 2019

Thanks! My thought is that you would create a "hold-co" for the GP which will be 10-20% of the equity while the LP will be 80-90%. Question is, how do you determine co-GP equity and fees splits? or even water fall hurdles? i almost think it would be 50/50 unless if someone does something really stupid which i imagine will lead to a law suit amongst co-GPs. I would think LP still has ultimate control due to issues amongst co-GPs. Just want to know what high level splits or pref waters falls would look like in this situation.

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Apr 16, 2019
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