Suppose equity investors have an agreement whereby the general partner/sponsor will split everything with the limited partners "pari passu" until an equity multiple of 3.00 is reached, then the GP/Sponsor will be entitled to a promote equal to 90% of any additional returns.

The sponsor/GP has invested 10% of the equity, and the limited partners have invested 90% of the equity.

What is the expected IRR of the sponsor/GP given the levered cash flows below?

CF0: -1,000,000 CF1: 200,000 CF2: 400,000 CF3: 600,000 CF4: 2,200,000

	34.2%
	62.9%
	18.5%
	42.1%
	92.4%
	80.0%
	71.3%
	32.6%