Carried interest

CFA Level II Alternative Investments
#1

Hi,

I`m on the mock exam 2019 morning session, question 46 (Yushah Capital Partners Case Scenario).

Can anybody help me with the following please: The carried interest (what the GP gets) is a % from (NAV before distributions - Committed capital). Ok, but can you help me how the carried interest for year 2013 and 2014 is calculated pls?

We have “The GBP 300 million fund has a vintage of 2011” - does that mean the total committed capital is 300? We also have a hurdle rate of 7% (not specified if hard or soft) and I`m not sure whether I should use this rate somewhere at all…

Tnx in advance,

#2

Carried Interest is the performance bonus, which is used with the hurdle rate. They only pay out when the hurdle rate is surpassed. Typically 10-20%

Management fee is calculated on AUM. typically much lower like 0.5%-2%

#3

Anybody please on the example on question 46?

#4

yes, I know. tnx

but my question was for the concrete calculation in the example given.