Private Equity

Question 1

Management fees

Answer 1

Calculated as the %age fee * total paid-in capital

Question 2

Carried interest

Answer 2

= %age carried interest * increase in NAV before distributions

Question 3

NAV before distributions

Answer 3

= NAV after distributions in prior year + capital called down - mgmt fees + operating results

Question 4

NAV after distributions

Answer 4

= NAV before distributions - carried interest - distributions

Question 5

DPI multiple

Answer 5

= cumulative distributions / paid in capital

Question 6

RVPI multiple

Answer 6

= NAV after distributions / paid in capital

Question 7

TVPI multiple

Answer 7

= DPI + RVPI

Question 8

Proportion of company received for investment in the company (f)

Answer 8

f = INV / PV(POST) = FV(INV) / exit value

Shares(vc) = shares(founders) * [ f / (1-f)]

Price = INV / shares(vc)