scottbrandon
New member
- Joined
- Feb 18, 2024
- Messages
- 33
Hello everyone,
I'm working on modeling how independent sponsors raise capital from investors, and I’d like to understand the math behind various deal terms. Suppose an independent sponsor secures a $20 million equity commitment. In particular, I want to see how independent sponsors investors arrangements are modeled in practice.
How would you mathematically calculate the internal rate of return and cash on cash multiple for investors given a targeted promote structure such as 20 percent carry above an 8 percent hurdle.
I’m also interested in how to calculate the impact of dilution if co investment rights allow additional capital injection, and how varying the management fee such as 1 percent versus 2 percent affects net investor return over a 5 year hold.
Can anybody share worked examples or spreadsheet formulas for these?
I'm working on modeling how independent sponsors raise capital from investors, and I’d like to understand the math behind various deal terms. Suppose an independent sponsor secures a $20 million equity commitment. In particular, I want to see how independent sponsors investors arrangements are modeled in practice.
How would you mathematically calculate the internal rate of return and cash on cash multiple for investors given a targeted promote structure such as 20 percent carry above an 8 percent hurdle.
I’m also interested in how to calculate the impact of dilution if co investment rights allow additional capital injection, and how varying the management fee such as 1 percent versus 2 percent affects net investor return over a 5 year hold.
Can anybody share worked examples or spreadsheet formulas for these?