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Sam's avatar

Hey SK one quick question on the example here:

For step 3, the GP catchup, I thought GP are catching up to 20% of the profits that already been distributed up to that point, rather than 20% of the profit pool? Basically LP already received 7.92M, then 7.92M / (80%/20%) = 1.98M rather than then 8.416M shown in the example.

I might be wrong but GP in this example are getting c. 15M of the profit pool (30%) which is significant higher than the 20% assumption, so just want to point out my confusion here

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A.MurvAI's avatar

Hi,

I think the math is still incorrect and that the catchup should go until the distributed profit is 80-20% between the LP and GP. So it should not be 20% of the 80%. It should actually be 25% of the 80% so after the catchup phase they have 80-20 ratio which they will keep afterwards as well until the whole profit is distributed.

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