Modelling how each dollar of distributable cash flows through the distribution waterfall tiers to quantify what the LP and GP each receive at different return outcomes.
Related terms
- Yield
The annual return on an asset expressed as a percentage of its value; closely related to the cap rate.
- Yield compression
A fall in market yields (cap rates), which pushes asset values up for the same income — a tailwind that has driven gains in prime Gulf markets during liquidity…
- Yield expansion
A rise in market yields (cap rates), which lowers asset values for the same income; typically driven by rising interest rates or perceived risk.
- Yield on cost (development yield)
Stabilised net operating income divided by total development cost; compared against the market cap rate to judge whether building creates value over buying.
- Blended return
A single return figure combining differently-priced tranches or investments — for example weighting senior debt and equity — to express the overall economics o…
- Blind pool
A fund that raises capital before its specific assets are identified, so LPs commit based on the sponsor's track record and strategy rather than a known portfo…
- Capital call
A formal notice requiring an LP to wire a portion of its committed capital by a set date; missing one triggers default penalties that can dilute or forfeit the…
- Capital contribution
Money an investor actually pays into a fund or deal against its total commitment, usually made in instalments as the sponsor draws it down.