CARRY/WATERFALL CALCULATION SOFTWARE PLATFORMS

colmore

colmore
colmore

colmore

  • Fund-level Waterfall Calculation
  • Carried-interest-vehicle-level Allocation (down to Carried Interest Holders/CIHs) & Carry Plans
  • LP Carry/Fee Validation
  • Other Carried Interest-related Software Platforms

BENEFITS

  • Reduces the spreadsheet reliance
  • Automates complex manual processes
  • Digitises fund, employee, investment and other data
  • Makesthe processes more reliable, from a control perspective
  • Cuts the process time down significantly (after the initial set-up)
  • Scales the relevant processes to practically unlimited number of funds, CIHs, investee funds, respectively

DRAWBACKS:

  • There is usually a significant cost associated with most of the software solutions
  • May have lengthy and/or costly implementation
  • Less transparency (the ‘black box’ issue) compared to other solutions (e.g. MS Excel)
  • If not implemented properly, can potentially undermine the whole process and result in losses

CARRY/WATERFALL MODELLING

colmore
  • MS Excel-based Carried interest/Waterfall Models & Templates
  • Other Related Fund Accounting Models & Templates
  • Carried interest/Waterfall Modelling Services
  • Model Review/Audit & Testing Services

BENEFITS

(if designed and tested properly):
  • Cheap (almost every computer already has MS Excel installed on it)
  • No lengthy and/or costly implementation
  • No significant additional training
  • Flexibility
  • Transparency & Auditability

DRAWBACKS:

  • Excel cannot handle well large volumes of data (the model can get very slow)
  • If not designed and tested properly, Excel models are susceptible to human error
  • If not protected, Excel models are prone to accidental amendments

HYBRID SOLUTIONS

colmore

  • Software as a Service (SaaS) solutions
  • Hybrid software with combined software and spreadsheet-logic features (‘spreadsheets on steroids’)
  • Other Hybrid Solutions

BENEFITS

  • Flexibility
  • Transparency & Auditability
  • Combine beneficial features from two or more categories

DRAWBACKS:

  • Typically, as expensive as software solutions
  • May have some of DRAWBACKS of the other categories features of which it incorporates

CARRY MODEL, SOFTWARE, METHODOLOGY & PROCESS CERTIFICATION

colmore

  • Carry/Waterfall Model Audit, Assessment and Certification
  • Carry Software Audit, Assessment and Certification
  • Carry Calculation Methodology Audit, Assessment and Certification
  • LP Carry/Fee Validation Methodology and/or Process Audit, Assessment and Certification

BENEFITS

  • Makes the product/services more robust and improves their quality
  • Reduces the risk of error and reputational and financial damaged to the provider
  • Endorses the provider’s brand through validating the quality of the product/services
  • Boosts client confidence and trust in the products/Good selling point to clients

DRAWBACKS:

  • May be costly
  • May require some time commitment from the provider

LP CARRY/FEE VALIDATION

colmore

colmore
colmore
  • Fully Outsourced LP Carry/Fee Validation
  • LP Carry/Fee Validation Software Platforms
  • LP Carry/Fee Validation SaaS Solutions
  • LP Carry/Fee Validation Excel Based Templates
  • LP Carry/Fee Validation Training
  • LP Carry/Fee Validation Methodologies, Procedures & Guidelines
  • LP Carry/Fee Validation Consultancy Services

BENEFITS

  • May result in significant savings in the form of refunds if mistakes are uncovered
  • Ensures transparency
  • Ascertains compliance with the LPA provision

DRAWBACKS:

  • Some of the solutions may be costly
  • Some of the solutions may require significant human resources and time investment

CARRY ALLOCATION &
CARRY PLANS

colmore
colmore
colmore

  • Carry Participant Allocations & Carry Plans Structuring
  • Carry Participant Allocations & Carry Plans Consultancy Services
  • Carry Participant Allocations & Carry Plans Software Platforms
  • Carry Plan Administration & Compensation Management
  • Deferred Cash & Vesting Schedules Management
  • Other Carry Allocation & Carry Plans Products & Service

BENEFITS

  • Improve employee incentives (applicable to structuring services)
  • Increase employee efficiencies (applicable to structuring services)
  • Increase fund performance/IRRs (applicable to structuring services)
  • Automate complex and/or varied multi-faceted calculations (applicable to software platforms)
  • Increased information management and reporting capabilities (applicable to software platforms)
  • Reduce reliance on spreadsheets and other manual processes (applicable to software platforms)
  • Digitise employee and other carry data (applicable to software platforms)
  • Make the processes more reliable, from a control perspective (applicable to software platforms)
  • Cut the process time down significantly (after the initial set-up) (applicable to software platforms)
  • Scale the relevant processes to practically unlimited number of funds, CIHs, investee funds, respectively
  • Improves user experience

DRAWBACKS:

  • There is usually a significant cost associated with these products & services
  • May have lengthy and/or costly implementation
  • Less transparency (the ‘black box’ issue) compared to other solutions (e.g. MS Excel)
  • If not implemented properly, can potentially undermine the whole process and result in losses

CARRY STRUCTURING

colmore

  • Fund Formation & Carry Structuring Legal Services
  • Carry Participant Allocations & Carry Plans Review, Structuring and Optimisation Services
  • Review and Redrafting of LPA Waterfall Provisions
  • Other Carry Structuring Services

BENEFITS

  • Optimise your structure from a tax perspective (applicable to Fund formation & Carry Structuring Services)
  • Pre-empt and fix potential mechanics and calculational issues with carry arrangements arising from the LPA wording applicable to... (Review and Redrafting of LPA Waterfall Provisions)
  • Identify incentive, allocation and mathematical issues with Carry Allocations & Carry Plans (applicable to Carry Participant Allocations & Carry Plans Review, Structuring and Optimisation Services)
  • Optimaise the efficacy of the GP carry allocations and carry plans from an incentive, structural and mathematical perspective (applicable to Carry Participant Allocations & Carry Plans Review, Structuring and Optimisation Services)

DRAWBACKS:

  • May involve significant cost

CARRY TECHNICAL TRAINING

colmore


  • Carried Interest Master Class
  • Build-your-waterfall-model Workshop
  • In-house
  • Online (in-person via WebEx, not pre-recorded) – group and one-on-one
  • Online (pre-recorded)
  • Open-enrollment

BENEFITS

  • Build a solid foundation of your understanding of the theory of carried interest and waterfalls – mechanics, modelling, accounting, and reporting
  • Helps you familiarise yourselves with the mechanics of a variety of waterfall arrangements (Whole-of-fund/European-style carry, Deal-by-deal/Hybrids, Multi-tiered Promote triggered by IRRs and Multiples, etc.)
  • Allows you to practice the theory you’ve learned through case studies and practical exercises
  • Equips you with a basic waterfall model at the end of the course (applicable to the Build-your-waterfall-model Workshop)

DISADVANTAGES

  • None

OTHER CARRY/WATERFALL
PRODUCTS & SERVICES

colmore

PEAI Publications