Sublime

A hurdle rate says that unless the fund generates a return in excess of the hurdle rate (this is a negotiated number, but often around 8 percent), the GP is not entitled to take her carried interest on the profits. If the fund exceeds the hurdle rate, then the GP can start collecting her carried interest as if the hurdle rate didn’t exist. So, as

Here are the additional financial assumptions we make when considering the investment property: Acquisition costs are 6% of the purchase price Capital growth forecast is 7% per annum Expected rental yield is 3.5% per annum Property management fees are 7.7% per annum Occupancy rate is 92% (we have allowed 4 weeks vacancy each year) No depreciation

Once the limited partners receive 100 percent of their money back, Cynthia and Mercedes receive 20 percent of any additional profits while the limited partners receive 80 percent. The 20 percent that Cynthia and Mercedes receive is referred to as carried interest.