Private equity

Percentage management fee = management fee / paid-in capital
paid-in capital = Σcalled-down (capital)


When
NAV before distribution₁ > Committed capital,

Carried interest₁ = (NAV before distribution₁ - Committed capital) * %Carried interest

Carried interest₂ = (NAV before distribution₂ - NAV before distribution₁) * %Carried interest


NAV after distribution = NAV before distribution - Carried interest - Distributions


Post-money valuation = V/(1+r)^t

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Adjusted post-money valuation discount rate = r'
π: probability of risk of failure


(1+r')(1-π)=1+r
(1+r')-π(1+r')=r'(1-π)+1-π=1+r
r'(1-π)=r+π


r'=(r+π)/(1-π)
= (1+r)/(1-π) + (-1+π)/(1-π)= (1+r)/(1-π) - 1