2. Aggie Partners is raising their first fund, Aggie Partners Fund I, with $200M in committedcapital, annual management fees of 1.75 percent, carried interest of 20 percent, and a carriedinterest basis of committed capital. The three individuals on the Aggie team have previouslymanaged the captive VC portfolio for the Presidio family. During the 10 years ofmanaging the Presidio's VC portfolio, the partners did not charge management fees orcarried interest, and they achieved an unknown GVM equal to K.a. For any given K, solve for the carried interest, value multiple, and GP%.b. How large must K be for the value multiple to be greater than 3?How would your answer to parts (a) and (b) change if the carry basis were equal toinvestment capital?с.

Carried interest is a performance-based fee structure used in the investment industry, primarily in…

Aggie Partners is raising their first fund, Aggie Partners Fund I, with $200M in committed ital, annual management fees of 1.75 percent, carried interest of 20 percent, and a carried erest basis of committed capital. The three individuals on the Aggie team have previously naged the captive VC portfolio for the Presidio family. During the 10 years of naging the Presidio's VC portfolio, the partners did not charge management fees or ried interest, and they achieved an unknown GVM equal to K. a. For any given K, solve for the carried interest, value multiple, and GP%. b. How large must K be for the value multiple to be greater than 3? C. How would your answer to parts (a) and (b) change if the carry basis were equal to investment capital?

Aggie Partners is raising their first fund, Aggie Partners Fund I, with $200M in committed ital, annual management fees of 1.75 percent, carried interest of 20 percent, and a carried erest basis of committed capital. The three individuals on the Aggie team have previously naged the captive VC portfolio for the Presidio family. During the 10 years of naging the Presidio's VC portfolio, the partners did not charge management fees or ried interest, and they achieved an unknown GVM equal to K. a. For any given K, solve for the carried interest, value multiple, and GP%. b. How large must K be for the value multiple to be greater than 3? C. How would your answer to parts (a) and (b) change if the carry basis were equal to investment capital?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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