Hey Guys,
I was wondering how is carried interest structured in debt/credit funds (unitranche, mezzanine, second lien...) ?
I guess that since IRR are lowers, the hurdle (generally 8% in PE funds) is also lower? How much is it?
And then what about the 20/80 split? Is is still the same?
As an investment team member, what kind of multiple can you expect on your invesment then?
Thanks a lot
Very anecdotal, but a friend in a credit fund has exactly the same 2/20 - 8% hurdle in place, which was a surprise to me.
6-7% hurdles are fairly common.
Carry rate itself often is in the 10-15% range depending on how much risk they take (senior secured stuff with lower carry rate and special sits / opportunistic stuff with higher rates)
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