This equity waterfall module is one of the more versatile that I’ve built for the A.CRE Library of Excel Models.
In terms of what this tool can do. With this module, you can
- Model either American-style or European-style waterfalls (read about American vs European waterfalls).
- Use either hard or soft hurdles (read about soft hurdles)
- Model soft hurdles using Sponsor Profit Catch Up and/or LP Clawback provisions
- Assume the Sponsor contributes some or no capital
- Set custom distribution percentages for each partner; by default distribution percentages are determined by a promote assumption, which is assumed to be paid by the partnership (read about promote calculations)
- Use separate distribution assumptions during operation compared to at reversion; this feature is available in my Equity Waterfall Model with a Cash-on-Cash hurdle as well
- Model up to two tiers during operation and up to four tiers and three IRR hurdles at reversion
- Add in sponsor fees and calculate the sponsor cash flow and returns
- Analyze a hold with up to 10 annual periods (plus time zero)