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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David Selden
Partner
Cooley
Mr. Selden’s clients include major financial institutions, fund sponsors, institutional investors, investment... | Read More
Mr. Selden’s clients include major financial institutions, fund sponsors, institutional investors, investment advisers and commodity trading advisors. He regularly advises on fund formations, management company structure, incentive compensation arrangements, evergreen products, and managed accounts. Mr. Selden’s experience includes establishing venture capital and other alternative investment funds across the UK and Europe, counseling on placement and other distribution arrangements, and advising in connection with the establishment of new fund managers and family offices.
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Aalok Virmani
Partner
Cooley
Mr. Virmani counsels investment fund sponsors on the domestic and international tax aspects of forming, organizing and... | Read More
Mr. Virmani counsels investment fund sponsors on the domestic and international tax aspects of forming, organizing and operating venture capital funds, private equity funds, real estate funds, hedge funds, debt funds and funds of funds. He frequently represents clients with respect to general partner-led fund restructurings, US and non-US investor representations, secondary transactions and minority investments in fund sponsors. In addition, Mr. Virmani often advises founders on the establishment of their investment management firms, including advising them on the organizational structure, employment matters, carried interest allocations and capital commitment funding strategies.
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