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In private equity investing, distribution waterfall is a method by which the capital gained by the fund is allocated between the limited partners (LPs) and the general partner (GP). [ 1 ] Overview
"Pre-money valuation" is a term widely used in the private equity and venture capital industries. It refers to the valuation of a company or asset prior to an investment or financing. [1] If an investment adds cash to a company, the company will have a valuation after the investment that is equal to the pre-money valuation plus the cash amount.
Private equity firms have never been known for elevating women, but in 2016, Carlyle promoted Sandra Horbach to co-head of its main U.S. buyout arm. This was a first for a major PE firm and ...
Structure of a private equity or hedge fund, which shows the carried interest and management fee received by the fund's investment managers. The general partner is the financial entity used to control and manage the fund, while the limited partners are the individual investors who receive their return as capital interest .
The public market equivalent (PME) is a collection of performance measures developed to assess private equity funds and to overcome the limitations of the internal rate of return and multiple on invested capital measurements. While the calculations differ, they all attempt to measure the return from deploying a private equity fund's cash flows ...
A waterfall analysis details the exact payouts to every shareholder on a company's cap table based on a specific amount of proceeds available to equity in a particular liquidity scenario. Since a company often does not know if, when, or how it will achieve a liquidity event, waterfall analysis typically covers a range of liquidity assumptions.
Residual income valuation (RIV; also, residual income model and residual income method, RIM) is an approach to equity valuation that formally accounts for the cost of equity capital. Here, "residual" means in excess of any opportunity costs measured relative to the book value of shareholders' equity ; residual income (RI) is then the income ...
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