Mathematics · Commercial Mathematics
A venture capital fund has a total corpus of 100 crore rupees. The fund structure includes a 2% annual management fee and a 20% carried interest with an 8% simple annual hurdle rate. The fund has an investment period of 5 years and a total life of 10 years. By the end of year 10, the fund has realized total exits worth 250 crore rupees. Assume for simplicity that all capital was called at the start of year 1 and all exits happened at the end of year 10. Which option correctly identifies the management fees, hurdle amount, carried interest, and LP distribution?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Fees: 2 crore; Hurdle: 8 crore; Carry: 25 crore; LP Distribution: 223 crore.
- 2Fees: 10 crore; Hurdle: 50 crore; Carry: 20 crore; LP Distribution: 220 crore.
- 3Fees: 20 crore; Hurdle: 80 crore; Carry: 30 crore; LP Distribution: 220 crore.✓
- 4Fees: 20 crore; Hurdle: 80 crore; Carry: 14 crore; LP Distribution: 216 crore.
Correct answer
Fees: 20 crore; Hurdle: 80 crore; Carry: 30 crore; LP Distribution: 220 crore.
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