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Sponsor Promote Calculator
The promote is the sponsor's carried interest — an outsized share of profits above preferred return that compensates the GP for finding, underwriting, and running the deal. This calculator isolates promote from pro-rata profit, shows the promote multiple on GP capital, and computes the total GP equity multiple.
GP promote $
$390,000
GP pro-rata share on non-promoted piece
$117,000
Total GP profit
$507,000
Promote as % of total profit
13.0%
Promote as multiple of GP capital
0.98
GP total equity multiple
2.27
How the math works
Sponsor promote is the GP's profit share above pref. This calc isolates the promote amount and shows what it means on both an absolute basis and relative to GP co-invest capital. A well-structured promote lifts GP returns to 3-5x their pro-rata share, which is the alignment mechanism LPs pay for.
Promote multiple is a shorthand: $800K promote on $400K co-invest = 2.0x promote multiple, on top of the 1.0x return of GP capital.
How to Use
- Enter GP co-invest and LP capital.
- Enter total profit above return of capital and pref owed.
- Enter the GP promote percentage above pref.
- Read GP promote $, pro-rata profit, and promote multiple.
Frequently Asked Questions
Why do LPs pay promote?
Because it aligns incentives. Without promote the GP only earns fees — which pay whether the deal works or not. Promote only hits if returns exceed pref, aligning GP with LP upside.
Typical GP co-invest?
5-10% of total equity on institutional JVs. Retail syndications can be as low as 0-3%. Higher co-invest means more skin in the game but lower promote multiple.
Promote multiple — what's good?
A 2-3x promote multiple on GP capital is solid sponsor economics. 5-10x is exceptional and typically requires very strong returns on a highly-structured deal.
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