Fund-Level Economics Model Template

This template models the economics of a private equity fund from the fund's perspective — how capital is called, deployed, returned, and split between LPs and the GP. It's a teaching framework you adapt to your own terms, not investment advice.

What the template covers

Capital and commitments

• Total fund commitments and the GP commit.
• A capital-call schedule spread across the investment period.
• Management fees, typically charged on committed capital during the investment period and on invested or net-invested capital thereafter.

Deployment and returns

• Deployment of called capital into portfolio investments.
• Assumed gross returns (MOIC and timing) by investment or vintage.
• Realizations flowing back to the fund over the hold period.

The distribution waterfall

The core of the model. A standard structure flows in this order:

1. Return of capital — LPs get their contributed capital back first.
2. Preferred return (hurdle) — LPs earn a preferred return before the GP shares in profits.
3. GP catch-up — the GP receives a share until the overall profit split reaches the target carry.
4. Carried-interest split — remaining profits split between LPs and GP at the carry percentage.

The model lets you toggle whether the waterfall is European (whole-fund) or American (deal-by-deal), which materially changes GP timing.

How to use it

1. Enter your fund terms — commitment size, fee rate and basis, hurdle rate, catch-up, and carry.
2. Set a deployment and realization schedule grounded in a realistic pace, not an idealized one.
3. Review the outputs — net-to-LP IRR and MOIC, gross-to-net spread, and total GP economics.
4. Run sensitivities — vary gross returns and timing to see how fees and the waterfall reshape net LP outcomes.

What to learn from it

• Fees and carry create a meaningful gross-to-net gap. Seeing it quantified builds intuition for what LPs actually experience.
• Timing dominates IRR. The same MOIC realized earlier produces a very different IRR — a lesson that shapes hold decisions.
• Waterfall structure shifts GP incentives. European vs. American waterfalls change when the GP earns carry, with real behavioral consequences.

Adapt the assumptions to your strategy and always have fund counsel review the actual terms in your LPA. A model clarifies economics; it does not replace legal documents.