Key Takeaways
- Funds have investment periods (3-4 years, deploying capital) and harvest periods (3-6 years, selling assets).
- European-style waterfalls are more LP-friendly (return all capital before carry); American-style pays carry deal-by-deal.
- Fund-level IRR is always lower than property-level IRR due to fees, carry, and uninvested capital drag.
- Capital recycling provisions effectively increase fund deployment capacity during the investment period.
This track contains subscriber-only lessons
Explore free tracks in this area of study, or subscribe for full access.
Browse available tracks"Advanced Modeling: Development Pro Formas, Funds & Attribution" is a Pro track
Upgrade to access all lessons in this track and the entire curriculum.
Test Your Knowledge
1.During a fund's investment period, management fees are typically calculated on what base?
2.What is the difference between European and American waterfall styles?
3.What is uninvested capital drag in fund-level modeling?