AUAF venture fund has raised $300m to invest in education sector in Afghanistan. The fund charges a management fee of 2.5% of the committed capital for the first 4 years, then it decreases by 30 basis points for subsequent six years. Carried interest is 25% based on investment capital. The fund makes a cumulative distribution of $700m over its lifetime. 

Calculate the following: 

a) lifetime fee 

 b) investment capital

 c) carried interest for GPs

 d) assume if the same fund wants to charge a carried interest of 30% based on committed capital. 

What will be carried interest for GPs? 

e) Now, assume the fund charges 20% carry based on contributed capital with 10% hurdle rate. What will be the total value of the carry if there is 100% catch up and if there is no catch up?

 

Answer rating: 100% (QA)

a Lifetime fee For the first 4 years the management fee is 25 of 300m 75m per year So total manageme... View the full answer