LP Tools
PE Fund Economics Calculator
Understand how fund size growth impacts GP economics. Calculate breakeven returns and analyze the trade-offs between management fees and carried interest.
Quick scenarios:
Current Fund (Fund I)
Target Fund (Fund II)
Returns
Using: 10-year fund, 20% carry, 8% hurdle, 30% fee margin
Key Insight
129% breakeven return
At $1000M with 1.75% fees, the GP needs 129% total return to match Fund I economics.Returns can drop 71pp.
GP Economics Comparison
Economic Impact
Income Composition
Distribution Waterfall Comparison
Fund I Waterfall
$500M fundGross Proceeds
3.0x gross multiple
$1.5B
Return of Capital
100% to LPs
$500.0M
Preferred Return
8% hurdle to LPs
$400.0M
LP Profit Share
80% of remaining profits
$480.0M
GP Carried Interest
20% carry
$120.0M
GP Fee Profit
30% margin on 2% fees
$30.0M
Total GP Economics
$150.0M
Fund II Waterfall
$1000M fundGross Proceeds
3.0x gross multiple
$3.0B
Return of Capital
100% to LPs
$1.0B
Preferred Return
8% hurdle to LPs
$800.0M
LP Profit Share
80% of remaining profits
$960.0M
GP Carried Interest
20% carry
$240.0M
GP Fee Profit
30% margin on 1.75% fees
$52.5M
Total GP Economics
$292.5M
Scenario Comparison
How Fund II economics change at different return multiples, compared to Fund I current economics.
| Scenario | Return Multiple | Mgmt Fee Profit | Total Carry | Total Earnings | vs Current |
|---|---|---|---|---|---|
| Conservative | 1.5x | $52.5M | $0 | $52.5M | -65.0% |
| Moderate | 2.0x | $52.5M | $40.0M | $92.5M | -38.3% |
| Strong | 3.0x | $52.5M | $240.0M | $292.5M | +95.0% |
| Optimistic | 4.0x | $52.5M | $440.0M | $492.5M | +228.3% |
Fund I Breakdown
$500M @ 2%Total Management Fees
$10.0M/year × 10 years
$100.0M
Fee Profit
30% margin on fees
$30.0M
Carried Interest
20% of profits above 8% hurdle
$120.0M
Total GP Income
$150.0M
Fund II Breakdown
$1000M @ 1.75%Total Management Fees
$17.5M/year × 10 years
$175.0M
Fee Profit
30% margin on fees
$52.5M
Carried Interest
20% of profits above 8% hurdle
$240.0M
Total GP Income
$292.5M
Disclaimer: This calculator provides simplified estimates for educational purposes. Actual fund economics depend on many factors including fee step-downs during the investment period, management fee offsets, recycling provisions, European vs American waterfall structures, GP catch-up provisions, clawback mechanics, GP commitment requirements, and market conditions. The waterfall shown is a simplified representation. Consult with professionals for specific investment decisions.
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