Cumulative LP Distribution Joint Venture Waterfall Model

Video Tutorial:

This is a joint venture model that can be used in any business context where the deal involves the cash flow distributions being driven by the total distributions to the LP (limited partner) over time. Each hurdle is a dollar value, once the dollar value is eclipsed, the logic goes to the next cash flow split to derive the amount going to the GP and LP over time.

The model runs for up to 60 periods so you can use it for a 5-year monthly or if you just want to use it on annual periods, simply delete any unused columns and nothing will break. All charts update accordingly with no issue.

This does account for the fact that cross-over periods will involve some of the distributable cash flow split at one hurdle rate and some at another or many. For example, period 3 may have a big cash flow distribution that results in multiple hurdles being met all at once. This will split the cash properly for each hurdle and the total periodic split will be the amount for each hurdle level.

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