1 Exercise 3 Questions 1. Wendy Lee is a portfolio mannger for an endowment fund. She wants to invest in a peivate equity fund for better diversification. Based on solely the analysis of the term which fund would your reccmmrad to Lee Table 1: Prive Equity Terms 2. Martha prepares the following data to illustrate the distribution waterlall mechanism No hurdle rate exists for the three projects. Under the total return method the cu- mulstive dollar amount the GP receives by the end of the three years is equal tor Table 2: Waterfall 400 million Carried Interest First project investment 20 million Second project investment 45 million Third project istnent50 million Proceeds from first project 35 million Proceeds from second project 35 million Proceeds from third project65 million