@@davinmoskal I think it's a circular reference problem (but I could be wrong)... If you look at one of the older waterfall models he uses solver to calculate a scenario with both catch-up and GP equity returns.
Sorry might be a silly question but why do you take the distributable cashflows as levered CF post-debt service but pre-tax? would it not be post-tax as well?
As always, smart work. Thanks Sir.
Thank you! What of in a scenario where there's a 50% GP Catch up, up to a 15% profit of all distributions; does this still hold true?
I don’t follow the logic behind zeroing out the catch up provision if the GP contributes equity into the fund. Can’t the GP still earn catch-up?
I'm confused about the same thing, why wouldn't the GP be able to catch up if they're contributing equity and if the LP's preferred return is met?
@@davinmoskal I think it's a circular reference problem (but I could be wrong)... If you look at one of the older waterfall models he uses solver to calculate a scenario with both catch-up and GP equity returns.
What if your hurdles also apply to operating cash flows?
Sorry might be a silly question but why do you take the distributable cashflows as levered CF post-debt service but pre-tax? would it not be post-tax as well?
The LP and GP may have different tax structure/liability. It is easier to model before-tax and then the entities calculate their own after-tax burden.
This tax refers to income/capital gain tax, not real estate tax.