Answered step by step
Verified Expert Solution
Question
1 Approved Answer
4. Suppose a fund invests $1 million in each of three portfolio firms. The first investment is held for the entire fund life and
4. Suppose a fund invests $1 million in each of three portfolio firms. The first investment is held for the entire fund life and finally proves to be a total bust, returning nothing. The second investment is harvested quickly for $5 million and there is a distribution at that point with the usual carry terms (GP:LP, 20:80). The third investment is the final one and turns out to also be a bust. If a clawback provision had been included in the agreement, would a clawback payment to the LPs be in order? (Ignore fees). Explain why or why not. If so, how much would be clawed back?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started