Calculate the irr on the investment of a limited partner

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Reference no: EM132005550

Suppose that EastCapital (EC), a venture capital firm, raises $250 million of committed capital. Over the 14-year life of the fund. $50 million of this committed capital is used to pay EC's management fee. As is typical in the venture capital industry. EC only invests $200 million (committed capital less lifetime management fees).

At the end of 14 years, the investments made by the fund are worth $830 million. EC also charges 20% earned interest on the profits of the fund (final fund value minus initial, investment net of management fees).

The proceeds from the investments arc collected at the end of the 14-year fund life. Calculate the IRR on the investments made by EastCapital. The IRR on the investments is %. (round to 2 decimals)

Calculate the IRR on the investment of a limited partner into EastCapital net of all management fees and expenses. The IRR for the limited partner is %. (round to 2 decimals)

Suppose that the limited partner has a cost of capital of 15%. Which value (net of carried interest) mast the fund at the end of 14 years have that the IRR for the limited partner is 15%? (define the profit to the limited partner in the same ways as is done in (b))

The fund must have a value of S million, (round to the nearest million, no comma as thousand separator) I need the workings or how to use financial calculator to solve this.

Reference no: EM132005550

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