Private Equity Waterfall and Carried Interest Provisions: Economic and Tax Implications for Investors and Sponsors
Distributions, Clawbacks, and Allocations; Carried Interest Sharing; Drafting to Address Tax Consequences
Note: CPE credit is not offered on this program
A live 90-minute premium CLE video webinar with interactive Q&A
This CLE course will analyze various alternatives to structure waterfall provisions in private equity funds, carried interest, and related clawback and allocation provisions. The program will also examine the tax implications of such provisions.
Outline
- Typical waterfall variations and their economic implications for investors and the sponsor
- Carried interest clawbacks
- Carried interest sharing arrangements at the general partner level
- Tax ramifications, allocation provisions, and tax distributions
Benefits
The panel will review these and other key issues:
- What are the typical approaches for structuring a private equity fund distribution waterfall?
- How do these variations impact the timing of carried interest distributions to the sponsor?
- What are some of the approaches to sharing carried interest at the sponsor level?
Faculty
Katherine McCullough
Partner
DLA Piper US
Ms. McCullough's practice focuses primarily on investment funds and asset management. She represents... | Read More
Ms. McCullough's practice focuses primarily on investment funds and asset management. She represents asset managers in forming and negotiating the terms of private equity funds, funds of funds, joint ventures, separately managed accounts, investment holding companies, and permanent capital vehicles, some of which include senior and subordinated debt tranches. Ms. McCullough also assists fund managers in establishing house entities for their platforms, including drafting constitutive documents for general partners and fund managers. She represents managers taking seed money from third-party anchor investors, and third-party anchor investors seeding private equity fund managers and other entities. Ms. McCullough also represents investors (including development finance institutions, sovereign wealth funds, and other institutional investors) in their investments in private equity funds, separately managed accounts, joint ventures, permanent capital vehicles, and co-investment vehicles.
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Skye W. Smith
Partner
DLA Piper US
Ms. Smith’s practice focuses on representation of institutional investors in connection with their investments in... | Read More
Ms. Smith’s practice focuses on representation of institutional investors in connection with their investments in private equity and other commingled vehicles, including buyout, venture capital, distressed debt, special opportunity, infrastructure, hedge and real estate funds. Her clients include public and private pension plans, university endowments, funds of funds, sovereign wealth funds, and family offices. Ms. Smith has significant experience representing investors in connection with primary commitments, co-investments, continuation vehicles, separately managed accounts, funds-of-one and other bespoke strategic investment arrangements across all asset classes. She routinely educates clients on market terms and adds value by providing practical strategic and legal advice to drive negotiations to the best possible outcome.
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Aalok Virmani
Partner
DLA Piper
Mr. Virmani advises investment fund sponsors on federal income tax matters. In particular, he focuses on the domestic... | Read More
Mr. Virmani advises investment fund sponsors on federal income tax matters. In particular, he focuses on the domestic and international tax aspects of forming, organizing, and operating private equity funds, private equity real estate funds, venture capital funds, hedge funds, debt funds and secondary funds. Mr. Virmani's practice includes counseling family offices with respect to establishing investment platforms and management incentive arrangements. He also regularly represents clients with respect to GP-led fund restructurings, U.S. and non-U.S. investor representations, secondary transactions, and minority investments in fund sponsors. Mr. Virmani spent significant time in-house as a principal at Equity International, a private equity firm that invests in non-U.S. real estate companies.
CloseEarly Discount (through 04/04/25)