If a Venture Capital fund with $10 million committed capital, charges 2.5% management fee per year for 10 years, and 20 percent (20%) carried interest with a basis of committed capital. If the fund earns a 2 times return on its investment. What is the IRR for Limited Partners if General Partners need to return committed capital before sharing the profit?
If a Venture Capital fund with $10 million committed capital, charges 2.5% management fee per year for 10 years, and 20 percent (20%) carried interest with a basis of committed capital. If the fund earns a 2 times return on its investment. What is the IRR for Limited Partners if General Partners need to return committed capital before sharing the profit?
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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If a Venture Capital fund with $10 million committed capital, charges 2.5% management fee per year for 10 years, and 20 percent (20%) carried interest with a basis of committed capital. If the fund earns a 2 times return on its investment. What is the
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