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Fund Distribution Waterfall Model with Carried Interest 

Excel model for calculating the distribution of funds between the Limited Partner (‘LP’) and General Partner (‘GP’) for a PE fund

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User-friendly Excel model for calculating the distribution of funds between the Limited Partner (‘LP’) and General Partner (‘GP’) for a private equity investment or fund.

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The model is flexible allowing the user to input up to 10 different underlying portfolio company investments within the fund with their individual capital contributions and distributions across a 10 year quarterly timeline with 3 scenarios. The cash flow and waterfall assumptions include equity contribution splits, LP hurdle rates, GP catch up provisions, GP carried interest, GP management fee and fund operating expenses.

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The model follows best practice financial modelling principles and includes instructions, checks and input validations.

KEY OUTPUTS

  • The model is generic and not industry-specific. The key outputs presented in both table and chart format include:

    • Waterfall of fund distributions

    • IRR on total fund basis and for GP and LP

    • IRR and net cash flows by investment company

    • Multiples of invested capital

KEY INPUTS

Setup inputs include:

  • Fund name

  • Names of underlying investments

  • Fund starting and ending quarter

  • Total fund amount

  • Currency

  • Waterfall assumptions including LP hurdle rate, equity contribution percentages, GP carried interest, GP catch up clause, GP management fee, Fund operating expenses

  • Scenario naming

 

Cash Flow inputs include:

  • Investment amounts by underlying portfolio company and scenario

  • Distribution amounts by underlying portfolio company and scenario

  • Fund distributions by scenario

  • Fund operating expense cash flows

MODEL STRUCTURE

The model contains, 6 tabs split into input ('i_'), calculation ('c_'), output ('o_’) and system tabs. The tabs to be populated by the user are the input tabs ('i_Setup' and 'i_Cash flows'). The calculation tab uses the user-defined inputs to calculate and produce the cap table outputs which are presented in ‘o_Dashboard’

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System tabs include:

  • A 'Front Sheet' containing a disclaimer, instructions and contents;

  • A checks dashboard containing a summary of checks by tab.

KEY FEATURES

  • The model follows best practice financial modelling guidelines and includes instructions, checks and input validations;

  • The model is not password protected and can be modified as required following download;

  • The model is screened using specialised model audit software to help ensure formula consistency and significantly reduce risk of errors;

  • The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):

    • Scenarios – 3 scenarios;

    • Underlying portfolio companies within fund – 10 companies

  • Fund Name and currency are fully customisable

  • The model includes instructions, checks and input validations to help ensure input fields are populated accurately

  • The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.

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