Question $2$

As a member of the investment team for the Drew University Endowment, you have been asked to evaluate the performance of

the Granite Venture Partners $($GVP$)$ Fund $(($vintage $2019)$ private equity fund. Granite was established to provide later stage equity

financing for cutting edge technology firms. The GP targets investment in portfolio companies betw een $$2$ million and $$10$ million.

Table $1-$ Fund Statistics.

GVP receives carried interest $($performance fees$)$ only after the fund has returned the entire committed capital to LPs$.$ Management fees

are calculated annually on the basis of paid in capital $($i$.$e$.$ treated like a front$-$end load$).$

a$)$ Based on the Cumulative Percentage of Capital Called $[\%$Called$)$ in Table $2,$ calculate the Fund's Annual Paid$-$In Capital. $(1$pt$)$

b$)$ Based on the Annual Paid$-$In Capital you calculated in part a$),$ calculate the Fund's annual management fees and annual predistribution NAV. $[2$pt$]$

$($Note$,$ in a Private Equity Fund, the Performance fee paid to the manager is considered a distribution$).$

c$)$ Calculate the Fund's annual Performance Fee $[$carried interest$].[2$pt$]$

d$)$ Calculate the post distribution NAV of the Fund. $[2$pt$]$

e$)$ As of the end of $2023,$ calculate the folloving performance metrics for the Fund: $[3$pt$]$

Hint: Your residual value is the Fund's post distribution NAV

f$)$ From the perspective of investors, calculate the annual net cash floy to investors and the Fund's IRR as of the end of $2023.[2$pt$]$

IRR

g$)$ As of the end of $2023,$ vould you say Drev's investmentment in the GVP I Fund has been positive or negative? Why? $[1$pt$]$