Capital Event Waterfall Calculator

Capital events trigger waterfall distribution.

Total distributable

LP equity

LP pref %

Hold years

Promote % above pref

GP distribution

$959,267

LP distribution

$11,040,733

Pref accrued

$2,162,934

How the math works

Accrued pref = equity × ((1+pref)^years − 1). Return capital first, pref, then promote on excess.

$6M × (1.08^4 − 1) = $2.16M pref. Capital + pref = $8.16M. $3.84M excess × 25% = $960k GP. LP $11.04M.

How to Use

Enter total distributable proceeds.
Enter LP equity.
Enter LP pref %.
Enter catch-up %.
Enter promote %.
Read GP and LP distributions.

Frequently Asked Questions

Waterfall tiers?

Tier 1: Return of equity (100% LP). Tier 2: Preferred return (100% LP at pref rate). Tier 3: Catch-up (100% GP until GP gets equal pref). Tier 4: Promote (typically 20/80 GP/LP above hurdle). Deeper waterfalls have multiple hurdles.

Typical terms?

Pref 6-10% IRR. First promote tier 20-30% GP. Second tier (above 15% IRR): 30-40% GP. Some deals: catch-up limited to 50% or 100%. Each negotiated.

Capital event?

Refi or sale. Often triggers accelerated promote. Refi: partial capital return triggers partial promote. Sale: full waterfall. Review OP language carefully — timing of promote critical.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.