As per my knowledge Catchup is calculated on preferred return. in the above case 16000/(100%-20%)*20%=4000. So that they share in 20:80 up to catchup(80%=16000 and 20%=4000). later they share remaining balance again in 20:80 i.e 9880000*20%=1976000 and 9880000*80%=7904000. so total amount received by GP=1980000(i.e. 1976000+4000) which 20% of 9900000 and total amount received by LP =7920000 which is 80% of 9900000. @@GMTIBAcademy
catch up should calculate on preferred return, not on remaining balance
What is preferred?
Why will you calculate?
As per my knowledge Catchup is calculated on preferred return. in the above case 16000/(100%-20%)*20%=4000.
So that they share in 20:80 up to catchup(80%=16000 and 20%=4000).
later they share remaining balance again in 20:80 i.e 9880000*20%=1976000 and 9880000*80%=7904000.
so total amount received by GP=1980000(i.e. 1976000+4000) which 20% of 9900000 and total amount received by LP =7920000 which is 80% of 9900000.
@@GMTIBAcademy
Waterfall calculation is not fully correct.
I have a doubt. What is a private equity product?
Check my private equity product video
It big brother or Mutual Fund