Act 4 · Waterfall & Distributions
Distribution Waterfall
European (whole-fund) waterfall · 8% hurdle · 100% GP catch-up · 20/80 carry split
Investment Thesis
Alignment-First Distribution Mechanics
The European waterfall structure ensures LPs receive full capital return plus 8% preferred return before any GP carry. This alignment-first approach, combined with escrow provisions and clawback protections, maximizes LP confidence and supports re-up rates for successor fund raising.
Implication 1
Current projections show carry breakeven at $1.68B total distributions — Fund IV is tracking 15% ahead of this threshold.
Implication 2
GP commitment of 5% ($100M) and 100% catch-up structure mean GP economics are fully aligned with LP returns above hurdle.
Total Distributions
$3.6B
Projected at exit
LP Distributions
$2.88B
Net to LPs
GP Carry
$335M+$18M
Carried interest
LP MOIC
1.62x
Net to LPs
GP MOIC
5.6x
On GP commitment
Projected Distribution Waterfall
Waterfall Tier Detail
4-tier European structure1
Return of Capital
LPs receive 100% of distributions until all called capital is returned
GP / LP
0 / 100
$1.93B
Cum: $1.93B
2
Preferred Return (8%)
LPs receive 100% until 8% IRR hurdle is achieved on called capital
GP / LP
0 / 100
$0.46B
Cum: $2.39B
3
GP Catch-Up (100/0)
GP receives 100% of distributions until GP has received 20% of total profits
GP / LP
100 / 0
$0.12B
Cum: $2.50B
4
Carried Interest (80/20)
Remaining distributions split 80% LP / 20% GP
GP / LP
20 / 80
$1.10B
Cum: $3.60B
Distribution History (Realized)
Capital return phase| Date | Type | Source | Amount | LP Share | Cumulative |
|---|---|---|---|---|---|
| 2023-Q4 | Recapitalization | Heritage Benefits Group | $85M | $85M | $85M |
| 2024-Q1 | Capital Return | NorthStar (partial) | $120M | $120M | $205M |
| 2024-Q2 | Capital Return | Sentinel (dividend recap) | $95M | $95M | $300M |
| 2024-Q4 | Capital Return | Atlas (partial exit) | $65M | $65M | $365M |
| 2025-Q1 | Capital Return | NorthStar (secondary) | $180M | $180M | $545M |
| 2025-Q2 | Capital Return | Pacific Coast (recap) | $45M | $45M | $590M |
| 2025-Q3 | Capital Return | Heritage (secondary) | $75M | $75M | $665M |
| 2025-Q4 | Capital Return | Cascade (secondary) | $50M | $50M | $715M |
All distributions to date are capital return (Tier 1). Hurdle has not yet been reached. GP carry begins after full capital return + 8% preferred.