XYZ Partners is raising their first fund, XYZ Partners Fund I, with $100M in committed capital, annual management fees of 2 percent, carried interest of 20 percent, and a carried interest basis of committed capital. The four individuals on the XYZ team have previously managed the captive VC portfolio for the Goldenbucks family. During the 10 years of managing the Goldenbucks' VC portfolio, the partners did not charge management fees or carried interest, and they achieved a GVM of 2.5. 1. Suppose that XYZ Fund I earns the same GVM as the partners earned for Goldenbucks. What would be the value multiple be for the fund? 2. What would be the GP% of the fund?
XYZ Partners is raising their first fund, XYZ Partners Fund I, with $100M in committed capital, annual management fees of 2 percent, carried interest of 20 percent, and a carried interest basis of committed capital. The four individuals on the XYZ team have previously managed the captive VC portfolio for the Goldenbucks family. During the 10 years of managing the Goldenbucks' VC portfolio, the partners did not charge management fees or carried interest, and they achieved a GVM of 2.5. 1. Suppose that XYZ Fund I earns the same GVM as the partners earned for Goldenbucks. What would be the value multiple be for the fund? 2. What would be the GP% of the fund?
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
Related questions
Question
XYZ Partners is raising their first fund, XYZ Partners Fund I, with $100M in committed capital, annual management fees of 2 percent, carried interest of 20 percent, and a carried interest basis of committed capital. The four individuals on the XYZ team have previously managed the captive VC portfolio for the Goldenbucks family. During the 10 years of managing the Goldenbucks' VC portfolio, the partners did not charge management fees or carried interest, and they achieved a GVM of 2.5.
1. Suppose that XYZ Fund I earns the same GVM as the partners earned for Goldenbucks. What would be the value multiple be for the fund?
2. What would be the GP% of the fund?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education