SmartHelping / Joint Venture Waterfalls / Excel
Preferred Return with Two GP Catch-ups
Model GP and LP cash flows through a preferred return, capital repayment, two optional GP catch-ups and a final profit split. Turn either catch-up on or off and see the effect on partner distributions and returns.
Immediate download after purchase. By purchasing, you agree to the Terms of Service.
See the model in action
See how each catch-up changes the GP and LP economics.
The walkthrough follows cash from the LP preferred return through capital repayment, optional GP catch-ups and the final distribution split.
What the template includes
Flexible preferred-return logic with two separate catch-up decisions.
Enter the deal cash flows, define the GP and LP economics and choose exactly where a GP catch-up should apply.
Define the LP preferred-return rate
Set the annual preferred-return assumption that controls the first priority distribution.
Set GP and LP funding shares
Define each partner's contribution percentage and enter contributions and distributions by period.
Choose whether unpaid preferred returns accrue
Use the built-in selector to carry unpaid preferred return forward or apply a non-accruing structure.
Turn compounding on or off
Choose whether unpaid preferred-return balances themselves earn additional preferred return.
Control how excess LP distributions reduce capital
Define whether distributions above the preferred return reduce the LP's outstanding capital basis.
Add a GP catch-up after the preferred return
Turn the first catch-up on or off and direct cash to the GP until the defined Tier 1 distribution rate is reached.
Add a second catch-up after LP capital repayment
Use a separate yes/no selector for the catch-up that follows the return of the LP's full investment.
Compare GP and LP performance
Review final IRR and equity multiple outputs for both sides of the venture.
Five-stage distribution sequence
Follow every dollar from the preferred return to the residual split.
The two catch-up stages are independent. Use either one, both or neither, depending on the agreement you are modeling.
01 / LP preferred return
Available cash first satisfies the LP preferred return under the selected accrual and compounding rules.
02 / Optional GP catch-up
If selected, cash moves to the GP until its cumulative distributions reach the defined Tier 1 rate relative to distributions already paid to the LP.
03 / LP capital repayment
Cash follows the Tier 1 GP/LP split until the LP has received its full initial investment back. Set the LP share to 100% when the agreement requires full priority on capital repayment.
04 / Second optional GP catch-up
After LP capital is fully repaid, the second catch-up can direct cash to the GP until the defined Tier 2 distribution rate is reached.
05 / Final distribution split
Once the active catch-up requirements are satisfied, remaining cash is distributed using the final GP/LP split.
How to use it
Configure the economics, enter the cash flows and review the partner results.
-
Enter partner contributions and deal cash flow
Set the GP and LP funding shares, then input the contributions and distributions for each period.
-
Define the preferred-return rules
Enter the rate and choose whether unpaid preferred return accrues, compounds and affects the LP capital basis.
-
Select the catch-up structure
Turn each catch-up on or off and define the GP/LP rates used before and after capital repayment.
-
Review allocations and returns
Follow cash through the waterfall and compare the GP and LP IRR and equity multiple outputs.
Analysis and reporting
See how catch-up timing changes each partner's outcome.
The worksheet makes the sequence visible so you can compare total distributions, promote economics and ending returns under different catch-up selections.
Test either catch-up independently
Switch each catch-up on or off without rebuilding the surrounding waterfall logic.
Trace GP and LP cash by stage
See when cash is directed to the LP, when the GP catches up and when the final split begins.
Compare GP and LP IRR
Review the final internal rate of return produced for each side of the venture.
Measure total cash-on-cash performance
Use the equity multiple outputs alongside IRR to compare total return and timing.
Who gets value from it
Built for teams modeling nuanced GP and LP waterfalls.
Real estate sponsors
Test catch-up mechanics before adding the waterfall to an acquisition, development or fund model.
Investment managers
Compare how catch-up timing, capital repayment and the residual split affect promote economics.
Limited partners
See how preferred return, return of capital and GP catch-up provisions affect investor cash flow.
Analysts and advisors
Explain a multi-stage distribution agreement with transparent calculations and partner-level outputs.
Also available in these bundles
Need more than one waterfall structure?
This preferred-return model is included in the following SmartHelping collections.
Joint Venture Waterfall Templates
Compare preferred returns, IRR hurdles, catch-ups, promote structures and other GP/LP distribution frameworks.
View Joint Venture TemplatesSuper Smart Bundle
Get the complete SmartHelping template collection for operating forecasts, valuation, waterfalls, finance and more.
View Super Smart BundleRelated financial models
Compare other joint venture and preferred-return structures.
Preferred Return with Investor Thresholds
Use investor-level thresholds to control participation in a preferred-return waterfall.
Explore the investor-threshold modelHybrid Joint Venture Waterfall
Combine a preferred return with a later hurdle driven by IRR or equity multiple.
Explore the hybrid waterfallPreferred Return Model
Use a traditional preferred-return structure with GP and LP cash-flow allocations.
Explore the basic pref modelPreferred Equity + Subordinate IRR Hurdle
Model preferred equity together with a subordinate investor return hurdle.
Explore the subordinate hurdle modelPreferred Equity with Equity Multiple Hurdle
Use an equity multiple threshold to trigger a later distribution tier.
Explore the equity multiple modelCash Flow Waterfall: 3 IRR Hurdles
Allocate distributable cash through three configurable IRR hurdle tiers.
Explore the three-hurdle waterfallIRR Hurdles with GP Catch-up
Combine IRR-based hurdle tiers with a dedicated GP catch-up calculation.
Explore the IRR catch-up modelPreferred Return: Multiple Hurdles / Simple Interest
Model a non-compounding preferred return with multiple distribution hurdles.
Explore the simple-interest modelPreferred Return Fund Tracker
Track preferred-return economics across an investment fund structure.
Explore the fund trackerCumulative Distribution Joint Venture
Allocate partner cash flow using cumulative distribution thresholds.
Explore the cumulative modelMixed-Use Real Estate
Analyze a mixed-use property with leverage and investor-level returns.
Explore the mixed-use modelMultifamily Acquisition
Underwrite a multifamily acquisition with financing and return analysis.
Explore the multifamily modelJoint Venture Models
Browse the broader SmartHelping collection of waterfalls and partner return models.
View all joint venture modelsHedge Fund Fee Model
Model management and incentive fees with a soft hurdle structure.
Explore the hedge fund modelSelf-Storage Multi-fund
Analyze a self-storage investment with multiple funding sources.
Explore the self-storage modelQuestions before you buy
A few useful details.
Where can the two GP catch-ups occur?
The first optional catch-up can begin after the LP preferred return is satisfied. The second can begin after the LP has received its full investment back.
How does a GP catch-up work in this model?
When a catch-up is active, available cash is directed to the GP until its cumulative distributions reach the rate defined for that stage relative to the distributions already paid to the LP.
What happens after the catch-up is satisfied?
Cash moves to the GP/LP split defined for the next stage. After the second catch-up, remaining cash follows the final distribution rate.
Can the preferred return accrue or compound?
Yes. Separate model inputs let you choose whether unpaid preferred return accrues and whether the unpaid balance compounds.
Is the model annual or monthly?
The template is built for 10 annual periods. To use monthly periods, extend the final formulas, expand the IRR and equity multiple ranges and convert the annual preferred-return rate to a monthly rate.
What outputs are included?
The model calculates GP and LP distributions, IRR and equity multiple so you can compare the effect of each catch-up selection on both partners.
Make the catch-up economics visible
Test two GP catch-up points without rebuilding the waterfall.
Configure the preferred return, capital repayment, catch-ups and final split, then review GP and LP results. One-time purchase for $75.
