On Page 51 of schwser note ( book 4) , fund committed capital 100Mio, carried interest 20% , investment of 40Mio is made, later in the year, fund exists the investment and earns a profit of 22Mio. with the total return method #1 ( carried interest can be paid only after the value of the portfolio exceeds committed capital) in the notes, the answer is , carried interest can be paid only after the portfolio value exceeds committed capital, which is 100 Mio, and total proceeds from the exit are only 62 Mio ( 40 + 22) , so no carried interest is paid my question is, shall the total portfolio value now be 60 Mio ( uncommitted capital) + total proceeds from the exit ( 62 Mio) = 122 Mio instead of just the exit value 62 Mio?
qxue… dont go chasing waterfalls… please stick to the rivers and the lakes that your used to.
ahhahaahha
By total portfolio, you probably mean NAV. NAV is now 62. Total committed cap is what investors have said they will invest and stand ready to be called in when the fund has investments. If not called in, they are still not part of the NAV yet. It is used only in connection of calculation of the carried.
thanks