1. LPs contribute 90% of the equity and fund 90% of any subsequent investments. 2. GPs contribute 10% of the equity and fund 10% of any subsequent investments. 3. All partners earn an 11% preferred return. 4. Distributions are pari passu until all capital is returned. 5. After all capital is returned, the GP receives 50% of cash flow until TOTAL equity has received an 18% return. (This payment is considered part of the excess cash flow to the GP at reversion.) 6. The GP receives 30% of cash flow thereafter

Answer rating: 100% (QA)

This scenario outlines the profitsharing and distribution structure within a Limited Partnership LP ... View the full answer