PE Waterfall Calculator
Model private equity distribution waterfalls with hurdle rates, GP catch-up, and carried interest.
Frequently asked questions
What is a PE distribution waterfall?
A distribution waterfall defines the order in which cash flows from a fund or deal are split between LPs and the GP. Typical structure: 100% to LPs until they receive their capital back, then a preferred return (often 8%), then a GP catch-up, then a promote split (often 80/20 or 70/30) on remaining profits.
What is a preferred return (pref)?
The pref is a minimum annualized return LPs receive before the GP earns any carried interest. An 8% pref means LPs get their capital plus 8% per year first; only after that hurdle does profit-splitting begin.
What is a GP catch-up?
After LPs earn their pref, the GP catch-up gives the GP a disproportionate share of the next dollars — often 100% — until the GP has effectively earned its promote percentage of all profits distributed so far. This ensures the promote split applies retroactively to total profits, not just profits above the pref.