[2] Acme Ventures LLC is considering 2 different structures for its new AV II fund of $100 million with a lifetime of 10

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2 Acme Ventures Llc Is Considering 2 Different Structures For Its New Av Ii Fund Of 100 Million With A Lifetime Of 10 1 (32.41 KiB) Viewed 22 times

[2] Acme Ventures LLC is considering 2 different structures for its new AV II fund of $100 million with a lifetime of 10 years. The firm is going to adhere to the industry standard of 2% management fees per year on committed capital and a 25% carry on the basis of committed capital in Structure 1, and 20% on investment capital basis in Structure 2. As part of the planning process, the firm assumes the exit proceeds at the end of the fund's lifetime to be $150 million, and the managing partner wants to know: (a) What would be the carried interest earned under each of these 2 structures? (b) If these numbers are different, what would be the amount of exit proceeds that will produce the same carry in both structures?