Fund Economics
Fees, carry, waterfalls, and the numbers that measure a vehicle’s performance.
Articles from the Syndicately blog on this topic.
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Side Letters in Private Investments
Read article: Side Letters in Private InvestmentsA side letter changes an SPV’s terms for one investor only, often through an MFN clause, co-investment rights, or a reduced fee. Here is…
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Key Terms in an SPV Operating Agreement
Read article: Key Terms in an SPV Operating AgreementAn SPV operating agreement sets the manager’s authority, the capital call process, and the distribution waterfall. Here is what to look for in each…
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How SPV Investors Get Paid After an Acquisition: Escrow and Earnouts
Read article: How SPV Investors Get Paid After an Acquisition: Escrow and EarnoutsWhen a portfolio company is acquired, SPV investors often get paid in stages: cash at closing, then an escrow release, then a possible earnout…
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Real Estate Syndication Fees Explained for Sponsors
Read article: Real Estate Syndication Fees Explained for SponsorsA plain guide to real estate syndication fees, covering acquisition, asset management, disposition, and refinance fees, and how they affect LP returns.
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LP Co-Investments Explained: How They Work in an SPV
Read article: LP Co-Investments Explained: How They Work in an SPVAn LP co-investment lets a limited partner invest directly in one deal alongside the fund, through a separate SPV, often with lower or no…
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GP Clawback Provisions: How the Repayment Obligation Works
Read article: GP Clawback Provisions: How the Repayment Obligation WorksA GP clawback requires general partners to return carried interest they were paid too early. Here is how the obligation is triggered, escrowed, and…
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Preferred Return vs Hurdle Rate: What Is the Difference
Read article: Preferred Return vs Hurdle Rate: What Is the DifferencePreferred return vs hurdle rate usually mean the same thing. Here is where they genuinely differ, how a GP catch-up works, and a worked…
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Carried Interest and the Three-Year Holding Rule
Read article: Carried Interest and the Three-Year Holding RuleSection 1061 requires a partnership to hold an asset more than three years before gain allocated to a carried interest gets long-term capital gains…
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IRR vs. MOIC: What Each One Actually Measures
Read article: IRR vs. MOIC: What Each One Actually MeasuresIRR measures how fast capital returns; MOIC measures how much came back. A worked example shows why two SPVs with the same MOIC can…
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Understanding Common Carry Percentage
Read article: Understanding Common Carry PercentageSpecial Purpose Vehicle (SPV) carried interest refers to the share of profits that an SPV manager receives as a reward for their role in…