Administration of private equity funds - Carried interests

Alternative investment funds remunerate their investment managers with a share of realised gain on their private equity investments on the basis of a required performance benchmark. Carried interest (partnership allocation) is considered as a tool to align the interests of both investors and investment managers.

Calculation methods are driven by private agreements and as some clauses or special considerations are unique to each fund, it is essential to understand the pitfalls and issues linked to its measurement.

PwC Academy is pleased to offer a training workshop dedicated to understanding the principles of carried interest calculation and to provide the opportunity to go through exercises and analysis of the most commonly used models.

By the end of this training, the participants will be able to:

• distinguish and understand the different methods/models of carried interest calculation;
• use classic carried interest schemes model in Excel;
• identify the potential issues and monitor the risks linked to specific clauses in the carried interest specifications;
• perform validation checks on carried interest calculation.

• Definition of main carried interest concepts and structure:
  • Principles of waterfall allocation
  • Hurdle rate and IRR calculation
  • Determination of preferred return and catch-up
• Modelling of carried interest waterfalls based on real life example
• Description of usual specific clauses and their calculation impact:
  • Deal-by-deal models
  • Claw-back and escrow clause
  • Variable hurdle and catch-up rates

An attendance certificate will be sent to participants.

This training is coordinated by Christophe Szymkoviak, Partner at PwC Luxembourg.

Christophe Szymkowiak is a partner in the Assurance department specialising in the asset management industry, with a focus on private equity funds and structures. He possesses extensive experience auditing private equity vehicles such as RAIF, SCSp, SICAR, SIF, part II funds, and AIFM/management companies, including unregulated entities. Christophe also serves as an instructor for PwC employees and clients within the private equity sector. His expertise encompasses infrastructure funds, direct equity/debt funds, Luxembourg GAAP, and team and project management. Notably, he manages audit client portfolios in private equity and maintains relationships with asset managers in France and the US.