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Sponsored by Lorman Education
Only registered attendee will receive continuing education credit.
Product ID: 406723
 
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Tax Implications of Private Equity Waterfall and Carried Interest Provisions

Live Webinar
December 4, 2019
1:00 pm ET (12 pm CT, 11 am MT, 10 am PT)
1 hour 40 minutes
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Gain a better understanding of sponsor’s “carried interest” and explore how preferred returns are commonly calculated.

A key aspect of a private equity fund is the sponsor promote or carried interest, which is simply the sponsor’s disproportionate share of profits in a deal above a predetermined (or preferred) return threshold. Relative to amounts invested, once the preferred return threshold has been met, residual cash flow distributions typically favor the sponsor. In general, the sponsor’s carry is calculated on either a ‘deal by deal or a whole fund basis. However, within this simple binary choice, there are myriad variations, any one of which can significantly alter the returns to sponsors and investors. This topic will define the sponsor’s carried interest, and explore the variations for structuring the carried interest, as well as how preferred returns are commonly calculated. In addition, this material will address different structures and related security arrangements of sponsor clawbacks, which protect investors from sponsors receiving carry they have not earned. Finally, this information will address other tax considerations that pervade all fund agreements and can impact sponsor and fund returns, such as fee waiver and tax distributions.

Learning Objectives

• You will be able to describe the various methods for structuring a sponsor’s carried interest.

• You will be able to identify and plan for phantom income for a sponsor.

• You will be able to review clawback provisions and understand the methods for securing a sponsor’s clawback obligations.

• You will be able to recognize tax boilerplate provisions of a JV agreement and explain how they work.

Registration

Live Webinar$199Register Now
Can't Attend?   Audio & Reference Manual$199Add to Cart