Distribution Catch-Up Calculator

Catch-up is the mechanic that brings GP to the target promote split after LP pref has been paid. During catch-up, GP typically gets 100% of distributions until their cumulative take = target promote of pref+catch-up combined. This calculator sizes the catch-up and shows remaining splits.

Cash available to distribute

Pref already paid to LP

Target promote after catch-up

Catch-up rate

GP catch-up distribution

$240,000

GP promote on remainder

$352,000

GP total

$592,000

LP total

$1,408,000

Catch-up amount needed

$240,000

Catch-up complete

Yes

How the math works

Catch-up gives GP 100% of distributions after pref until the overall split matches the target promote. Example: 20% promote with 100% catch-up — LP gets 8% pref first, then GP gets 100% until GP is at 20% of pref+catchup combined. Remaining is split 80/20.

Catch-up is a sponsor-friendly mechanic — it front-loads GP promote and smooths promote earnings across deals. LPs should evaluate whether catch-up is appropriate given the risk profile of the deal.

How to Use

Enter cash available to distribute.
Enter pref already paid to LP.
Enter target promote and catch-up rate (typical 100%).
Read GP catch-up, promote on remainder, and LP total.

Frequently Asked Questions

Why catch-up?

Without catch-up, GP promote only comes from profits ABOVE pref. If pref consumes most of distributions, GP promote is small relative to target. Catch-up ensures GP gets their target promote percentage of total profit.

50% vs 100% catch-up?

100% = GP gets 100% of distributions during catch-up until target is reached (faster catch-up). 50% = GP gets 50%, LP 50% during catch-up (slower). 100% is more common in institutional JVs.