Private Markets

Catch-Up

Definition

What is Catch-Up?

A waterfall stage allowing the manager to receive a larger share of distributions after investors receive the preferred return.

Example in practice

The GP receives the next distributions until its agreed profit share catches up.

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Investment in privately held companies, often with active ownership and a multi-year exit plan.

Equity financing for young, high-growth companies with substantial uncertainty.

An individual who invests personal money in early-stage companies.

A preliminary document outlining the main commercial terms of a proposed investment.

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