4-Tier IRR GP Catch-Up Waterfall with JV Split
A four-tier IRR equity waterfall with a full GP catch-up tier, built for joint ventures with two partners on the sponsor side. It distributes cash flow between the limited partner and the JV entity, then splits the JV entity's share between the GP and a Co-GP, so each partner sees its own capital, promote and returns.
Model Features
- Four IRR-based distribution tiers. A preferred return, a GP catch-up, and two further IRR hurdle tiers with escalating promotes.
- GP catch-up tier. Brings the JV entity up to its full negotiated share of profit once the preferred return is satisfied.
- Two-level waterfall. Cash flow is distributed between the LP and the JV entity first, then split again inside the JV entity.
- GP and Co-GP split. Share of JV equity and share of promote are separate inputs, so capital and promote can be divided differently.
- Returns for every partner. Profit, IRR and equity multiple for the LP, the JV entity, the GP and the Co-GP.
- Promote tracked by tier. Shows how much of each partner's distributions comes from the catch-up and from each promote tier.
- Editable assumptions. Hurdle rates, preferred return, catch-up percentage, promote splits and the GP and Co-GP shares are all inputs.
How this differs from the standard version
The JV split is the difference. The standard model treats the sponsor side as a single general partner. This version adds a second level for deals where two partners share the sponsor side, such as an operating partner and a capital partner, and splits the JV entity's cash flow between them by share of equity and share of promote.
If a single sponsor sits on the general partner side, use the 4-Tier IRR GP Catch-Up Waterfall instead.