Economics · Private Equity
In private equity, the 'Hurdle Rate' is best defined as:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The maximum leverage ratio permitted in a leveraged buyout
- 2The annual management fee charged by the General Partner
- 3The minimum internal rate of return (IRR) required before the General Partner earns carried interest✓
- 4The maximum loss a fund can sustain before liquidation
Correct answer
The minimum internal rate of return (IRR) required before the General Partner earns carried interest
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