10-year private equity fund had $200 million of committed capital, annual management

fees of 2% of committed capital during its whole life. Assume that by the end of year 6, the fund has

invested $100 million. The fund realizes its first exit at the end of year 6 for $120 million of total

proceeds. Assume there is no hurdle and that carried is 20% of capital gains and calculated the

European way.

a. Should the GP get a carried and if so, of how much?

b. Same question assuming the exit is for $130 million?

Answer rating: 100% (QA)

a To determine whether the general partner GP should receive carried interest and the amount we need ... View the full answer