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Per-Stream Tiered Waterfall

Every Dollar Flows
Through the Right Tier.

Configure return of capital, preferred return, GP catch-up, and promote tiers separately on cash flow, appreciation, and sale proceeds. No more forcing one structure onto three different income streams.

5
Above Super-Hurdle
70/30 split above 15% IRR
70% LP / 30% GP
4
Promote Tier
80/20 split between pref and super-hurdle
80% LP / 20% GP
3
GP Catch-up
100% to GP until GP has 20% of pref distributions
100% GP
2
Preferred Return
8% annual compounding on unreturned capital
100% LP
1
Return of Capital
100% to each partner until contributions repaid
Pro rata

Waterfall on Each Stream, Independently

Cash flow, appreciation, and sale proceeds each have their own tier structure — because real syndications don't apply one waterfall to all three.

Tier Cash Flow Appreciation Sale Proceeds
1. Return of Capital 100% pro rata
2. Preferred Return 8% compounded 8% compounded Unpaid pref balance
3. GP Catch-up 100% to GP until 20% of pref
4. Promote 80/20 80/20 80/20 up to 15% IRR
5. Super-hurdle 70/30 above 15% IRR

3 Hurdle Types. Pick Whatever Your OA Uses.

Promote hurdles can be defined as an IRR, an equity multiple, or a flat percentage.

IRR Hurdle

“80/20 until LP hits a 15% IRR, then 70/30.” Most common in institutional deals.

Equity Multiple

“80/20 until LP hits 2x, then 70/30.” Common in shorter-hold value-add deals.

Flat Percentage

“50/50 above 12% cumulative return.” Simple split, often used in friends-and-family deals.

The Math, In Black and White

For a $1M raise at 8% pref, 20% catch-up, 80/20 promote, 5-year hold, $400K gain at exit:

# Tier 1 — Return of Capital
LP receives: $1,000,000 → contribution returned
# Tier 2 — Preferred Return (8% compounded × 5yr)
LP receives: $469,328 → pref accrued
# Tier 3 — GP Catch-up (100% to GP until GP = 20% of pref)
GP receives: $117,332 → catch-up
# Tier 4 — Promote (80/20)
LP receives: $? → 80% of remaining
GP receives: $? → 20% of remaining
# Result
LP effective IRR: ~14.2%
GP effective IRR: ~22.7% (promote + catch-up + fees)

Model the Waterfall With Confidence

Unlimited tiers, three streams, every hurdle type — rendered in black and white.

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