Private Equity Preferred Return Catch-Up Calculator

Blend contributed capital, elapsed years, hurdle rate, and distributions to surface the outstanding preferred return, GP catch-up pool, and which side receives the next dollar in your waterfall.

Capital actually called from LPs so far.
Elapsed years since the first capital call that started the pref accrual.
Annual preferred return (hurdle) expressed as a percent, such as 8 for an 8% pref.
LP distributions to date prior to catch-up.
Defaults to contributed capital if blank so unfunded commitments read as zero.
Use the GP carry percentage once catch-up is complete (defaults to 20).

For fund-modeling context only. Always reconcile against the partnership agreement and audited capital statements.

Examples

  • $32M contributed over 4.5 years at an 8% pref with $10M distributed ⇒ $35.24M pref still owed, GP catch-up $3.31M, next dollar 100% LP
  • $32M contributed, 8% pref, $52M distributed ⇒ pref cleared, catch-up exhausted, next dollar splits 80% LP / 20% GP

FAQ

Does the tool assume European or American waterfalls?

It mirrors a whole-of-fund (European) waterfall where the preferred return is satisfied before the GP participates. For deal-by-deal waterfalls, enter contributions and distributions specific to that deal.

How do I include recycling or recallable capital?

Add the recycled draw to contributed capital once it has been recalled so the preferred return compounds on the higher base in line with your LPA.

What if the carry percentage is different?

Enter your carry rate in the optional field—the calculation will resize the GP catch-up pool and the long-term split automatically.

How can I monitor GP clawback risk?

Use the remaining catch-up amount to benchmark how close the GP is to its agreed share. If negative, you may need to true-up prior carry distributions according to the clawback clause.

Can I test a mid-life pref reset?

Yes—adjust the fund age and preferred return rate to reflect any reset mechanics from amendments or subscription lines, then compare the before-and-after outputs.

Additional Information

  • Preferred returns accrue on contributed—not committed—capital until LPs receive capital back plus the hurdle rate.
  • The GP catch-up pool equals carry share divided by the LP share times pref growth; once cleared you drop into the long-term split.
  • If the model shows a catch-up remaining, future distributions flow 100% to the GP until the pool zeroes out.
  • Unfunded commitments surface how much dry powder is still callable relative to the unpaid pref.

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