Triumph Partners closed Triumph Fund III four years ago with committed capital of $150 million. They...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Triumph Partners closed Triumph Fund III four years ago with committed capital of $150 million. They have so far invested $120 million. The limited partnership agreement is settled based on a management fee of 2.5% and a carried interest of 25%. Last year (i.e. year 3 of the fund's life), the general partners distributed $85 million to the limited partners for the first time. This year (year 4), they have distributed another $75 million. Assume that committed capital is the basis for calculating profit. The limited partnership agreement specifies that partners can collect carry once committed capital is returned to LPs and a priority return (hurdle) rate of 5% (this hurdle rate is NOT a per annum hurdle) is met. A 100% catch-up provision also applies. If there is no further distribution this year and the distribution for next year (year 5) is expected to be positive $26.0 million, what is the amount of carried interest that the general partners can expect to earn next year? Please answer in millions of dollars to two decimal places (e.g. $1,500,000 should be entered as 1.50) Triumph Partners closed Triumph Fund III four years ago with committed capital of $150 million. They have so far invested $120 million. The limited partnership agreement is settled based on a management fee of 2.5% and a carried interest of 25%. Last year (i.e. year 3 of the fund's life), the general partners distributed $85 million to the limited partners for the first time. This year (year 4), they have distributed another $75 million. Assume that committed capital is the basis for calculating profit. The limited partnership agreement specifies that partners can collect carry once committed capital is returned to LPs and a priority return (hurdle) rate of 5% (this hurdle rate is NOT a per annum hurdle) is met. A 100% catch-up provision also applies. If there is no further distribution this year and the distribution for next year (year 5) is expected to be positive $26.0 million, what is the amount of carried interest that the general partners can expect to earn next year? Please answer in millions of dollars to two decimal places (e.g. $1,500,000 should be entered as 1.50)
Expert Answer:
Answer rating: 100% (QA)
Calculating Triumph Partners Carry Interest for Year 5 Given Information Committed capital 150 milli... View the full answer
Related Book For
Venture capital and the finance of innovation
ISBN: 978-0470454701
2nd Edition
Authors: Andrew Metrick
Posted Date:
Students also viewed these finance questions
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The Assembly Department of Zip Surge Protectors began September with no work in process inventory. During the month, production that cost $39,860 (direct materials, $9,900, and conversion costs,...
-
The payroll of Sumerlus Corp. for September 2014 is as follows. Total payroll was $485,000. Pensionable (CPP) and insurable (EI) earnings were $365,000. Income taxes in the amount of $85,000 were...
-
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is...
-
Darice Goodrich receives cash from customers as part of her job duties. Her other duty is to post the receipts to customer accounts receivable. Based on these duties, her company has weak a. ethics....
-
Identifying long-term operational assets Required Which of the following items should be classified as long-term operational assets? a. Prepaid insurance b. Coal mine c. Office equipment d. Notes...
-
+ Question 01 Determine the Statement of Financial Position inventory carrying value for Products A, B, and C assuming that Stars Co. prepares its financial statements according to US GAAP. Product A...
-
The Antwerp Lions play in the Flemish Football League. The Lions play in the Antwerp Stadium (owned and managed by the City of Antwerp), which has a capacity of 30 000 seats (10 000 lower-tier seats...
-
You are an Audit Senior currently planning the 30 June 20X9 audits of Comp Limited (Comp), Health Limited (Health) and News Limited (News). At recently scheduled planning meetings with Comp, Health...
-
How does lean production improve lead times and customer responsiveness?
-
How does lean production impact quality management and reduce defects in the manufacturing process?
-
a) Distinguish between duality theorems I and II. [6 Marks] b) Using a two-product two constraint case for a firm production characterise and discuss the duality of the maximization problem. [5...
-
How does lean production incorporate the concept of "pull" to synchronize production with customer demand?
-
A string is wound around a uni radius 0.4 m and mass 3 kg. The disc is released from rest with the string vertical and its top end tied to a fixed support. h F: 3 kg W 0.4 m Calculate the speed of...
-
Compute the indicated technique for Project K and recommend whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent,...
-
Government is advised to tax goods whose demand curves are inelastic if the goal is to raise tax revenues. If the goal is to discourage consumption, then it ought to tax goods whose demand curves are...
-
Largeco pension plan begins investing in VC funds in 2006. They commit to a few new funds every year. They compute returns to their VC portfolio by adding the cash flows they receive and the reported...
-
Drugco has just begun Phase III trials for Newdrug. For simplicity, we assume that we are sure the drug has no side effects, so all that matters for FDA approval is its efficacy. Efficacy is...
-
True, False, or Uncertain: The harmonic mean will always provide a lower valuation than the geometric mean, which in turn will always provide a lower valuation than the median.
-
Derive the mass matrix of each of the systems shown in Figs. 6.22 using the indicated coordinates. G3 G5 15 13 k2 04 Mcos wt 01 02 4 kn 12 G G4 16 G6 G Number of teeth on gear G = n, (i = 1 to 6)...
-
Derive the equations of motion of the system shown in Fig. 5.12(a), using Lagrange's equations with (a) \(x_{1}\) and \(x_{2}\) as generalized coordinates and (b) \(x\) and \(\theta\) as generalized...
-
Derive the equations of motion of the system shown in Fig. 6.36 by using Lagrange's equations with \(x\) and \(\theta\) as generalized coordinates. Figure 6.36:- m k 00000 m T x FIGURE 6.36 Mass and...
Study smarter with the SolutionInn App