A Study on the System and Calculation of the Investment Return Distribution in Partnership Private Equity Funds

SHI-FEN WANG

Abstract


Nowadays, the private equity investment is developing dramatically. For the partners of the private equity funds, the principles of return distribution have the special importance. This article concludes, through the induction of the methods of profit distribution and the calculation of the returns of the partnership PE funds, that the different profit distribution methods have different influences on the returns of partners. The barrier return rate raises the threshold for the bonus of performance received by the General Partners (GP), which facilitates better risk control and GP drive. Using the financing from the financial institutions, the PE funds can allow full play to their leverage to achieve the low-cost financing for the funds.

Keywords


Partnership private equity funds, Profit distribution, Calcualtion


DOI
10.12783/dtssehs/seme2017/18017

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