How to Track a Catch-Up Provision as an LP

How to track a catch-up provision is the remaining-dollars ledger after preferred return is already met: catch-up rate from the LPA, catch-up base, profits already allocated to the GP in that tranche, and remaining catch-up until the agreed carry split. Raziel's preferred return hurdle tracking page is remaining to hurdle. Raziel's PE waterfall tracking page is the full tier map. Clawback is excess carry after over-distribution. This page is catch-up remaining.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed LPA and the latest notice. Do not invent a catch-up percentage or a market pref.

What catch-up is (and is not)

ILPA's Private Equity Glossary: once the general partner has provided limited partners their preferred return, if any, the GP typically enters a catch-up period in which it receives the majority or all of the profits until the agreed profit-split, as determined by the carried interest, is reached. Investopedia's distribution-waterfall entry lists a catch-up tranche after return of capital and preferred return, and describes that tranche as 100 percent of distributions to the sponsor until it receives a certain percentage of profits. Definitions only. Your balances are on the notice.

Goodwin (March 2024): catch-up kicks in only after investors recoup original investment plus the preferred return or hurdle, then continues until the sponsor has received an amount based on the carried interest rate in the governing document. For private equity and venture capital funds, Goodwin states carried interest is usually 20 percent, so during catch-up the sponsor receives until it holds 20 percent of the total profits distributed to both investors and the sponsor. Cooley (TheFundLawyer, June 2026): a full catch-up gives the GP 100 percent of the next profits until the sharing ratio; a tapered catch-up gives a higher-than-normal but less-than-100 percent share until the same result. Copy the clause you signed.

Seven columns on one fund row

Open one row per fund after the preferred-return step is done (or when the notice first posts catch-up). If a field is missing, store that it was missing. ILPA Principles 3.0 (June 2019) tells LPs to check preferred return calculations (proper catch-up) against GP-reported numbers, and wants waterfall provisions readable to non-lawyers.

• Waterfall type from the LPA. Whole of fund versus deal by deal. Principles 3.0 calls whole-of-fund best practice. ILPA published separate Model LPAs for each. Cooley: European (whole-fund) generally requires return of contributed capital before carry distributions; American (deal-by-deal) may allow carry after a realized investment if stated conditions are met. Store the type; catch-up timing follows that clock.

• Pref / hurdle already accrued. Pointer only. Remaining to hurdle lives on the preferred-return page. Here, record whether preferred return is satisfied as of the notice date (yes, no, or partial). Do not recompute accrual math.

• Catch-up percentage to GP. Copied from the LPA. Goodwin Terms Database sample: a majority of PE (84 percent), VC (80 percent), and debt (64 percent) funds use 100 percent catch-ups; most real estate funds use 50 percent; infrastructure varies. Mayer Brown (May 2020) on the ILPA Model Fund Agreement: after capital and preferred return, the Model LPA entitles the GP to a catch-up (bracketed percentage to the GP is 80 percent), then 20 percent of further distributions. Those Model percents are brackets. Your rate is in your LPA.

• Profits already allocated in catch-up vs remaining to fill. Cumulative dollars (or percent of the catch-up target) already credited to the GP in the catch-up tranche, and the gap still needed before the ongoing carry split. Date both. Do not invent sample dollars.

• Catch-up base. Whether the LPA measures catch-up against profits including the preferred-return distributions, or against a narrower base. On the ILPA Model LPA whole-of-fund waterfall (Mayer Brown; Raziel preferred-return page), catch-up runs until the GP has received the bracketed share of cumulative distributions on the preferred-return step and the catch-up step together. Copy your LPA's base language.

• Date catch-up completed (or still open). The notice date when catch-up filled, or "still open" with the as-of date. Principles 3.0 wants disclosure when a hurdle is exceeded. Catch-up complete is later.

• Next split after catch-up. The ongoing carry split in the LPA after catch-up. Goodwin and Cooley treat that as the agreed carried-interest ratio. Copy yours. It is not Dist: Carry cash already taken on a fee page.

Remaining catch-up is not remaining to hurdle

Remaining to hurdle is preferred accrued minus preferred paid. Remaining catch-up is how much more the GP must receive in the catch-up tranche before the ongoing split. Feed dated cash to an IRR calculator only after you know which dollars were return of capital, preferred, catch-up, or post-catch-up split. A headline net IRR is neither.

When the ledger holds

The row holds if waterfall type is from the LPA, preferred status is a pointer, catch-up percentage and base are copied, allocated-versus-remaining catch-up figures are dated from the notice, completion date or still-open is explicit, and the next split is the LPA's post-catch-up carry split. It fails when you paste a Model bracket or Goodwin sample share as your terms, treat catch-up remaining as remaining to hurdle, or skip because clawback has not posted. Raziel's alternative-asset dashboard is the investment record those rows can sit on: cash dates, documents, IRR and MOIC, AI ingest of the pack. Raziel does not run the catch-up calculation and does not give investment advice. Copy the seven columns. Leave the LPA math on the agreement and the notice.