1. A private equity fund pays the general partner a 20% carried interest. The carried interest feature has a 100% catch-up feature. The limited partners are entitled to an 8% per year preferred return on their investment in the fund. Calculate the amount of profits allocated to the general partner and the limited partners in year 3 and year 4 based on the following assumptions. The fund has $250 million in committed capital. In year 3, the fund sells its first investment, generating $25 million in the sale. The fund invested $15 million in the company. In year 4, the fund sells its second investment, generating $50 million in proceeds. The original equity investment was $20 million. Assume the holding period for each investment was two years and that there have not been any other divestitures, dividends, or recapitalizations.