Life Cycle of a Private Equity Fund - Part 2

Hinzugefügt: 2026-05-15

[00:00:00]This is the stage where NAV starts to move and performance tracking truly begins.

[00:00:07]>> [music] [music] >> Eventually, investments are sold through IPOs, strategic sales, or secondary exits. The investments are removed, [music] realized gains are recognized, and now the waterfall comes [music] into play. Profits are allocated between LP and GP, carried interest is booked. This is [music] where years of strategy turns into real returns.

[00:00:43]>> [music] >> Now, the fund distributes money. First, return of capital, then preferred return, then catch-up, and finally carried interest. Capital accounts are adjusted, performance metrics start shining like DPI, TVPI, MOIC, [music] and IRR.

[00:01:03]Finally, remaining investments are sold, final audits are completed, clawbacks are reviewed, capital accounts are cleared. The fund is basically deregistered, and the fund that started as a commitment ends as [music] a track record. If you want to understand private equity from formation to liquidation, follow for more deep insights into fund accounting.

[00:01:23]>> [music]