# PE Fund Model Build a private equity fund model with tiered waterfall logic, capital call and distribution schedules, management fee calculations, and fund-level IRR, TVPI, and DPI outputs. - Canonical: https://finamodel.com/templates/pe-fund-model - Excel download: https://finamodel.com/templates/pe-fund.xlsx - Category: Private Equity - Model type: Fund / Waterfall - Difficulty: Advanced - Audiences: Fund managers, Bankers & advisors, LP investors, Fundraisers, Secondaries buyers - Tags: fund-level, lp-returns, carry, moic, vintage ## Overview Model LP capital calls, management fee step-downs, and carry distributions across a closed-end private equity fund lifecycle. This template tracks five vintage cohorts deployed over five years, captures LBO leverage effects on each investment, and calculates LP net IRR, MOIC, DPI, and TVPI metrics alongside GP economics. The waterfall applies European whole-fund structuring: return of capital, preferred return, catch-up, and residual carry splits. The workbook includes capital deployment scheduling with fee mechanics (2% on committed capital during investment period, stepping to 1.5% on invested capital net of exits), portfolio-level EBITDA growth, debt amortisation at entry leverage, and exit proceeds by cohort. Each vintage's gross MOIC is tracked independently, and the model handles the tax shield from LBO interest expense through a levered NOPAT calculation. LP cash flow shows the J-curve: deep negative in Years 1–5 (capital calls and fees), turning positive in Years 6–8 as exits begin, with full realization by Year 10. Target users are LP evaluators (pension funds, endowments, family offices), PE fund GPs structuring investor terms, and secondary buyers assessing fund-to-fund opportunities on a $300M to $1B fund size basis. ## What's included - GP/LP waterfall with preferred return, catch-up, and carried interest - Capital call and distribution scheduling with J-curve visibility - Management fee logic with recycling and offset options - Portfolio company tracking with IRR and MOIC outputs - Fund-level metrics including TVPI, DPI, RVPI, and net IRR - Committed capital and capital call schedule - Investment deployment by vintage year and sector - Management fees and carry calculations - Exit timing and distribution waterfall logic - LP distributions and net IRR by investment - Fund-level MOIC, DPI, and cash flow tracking ## What a PE Fund Model Template Captures: Waterfall, Fees and Returns This pe fund model template illustrates the mechanics of a closed-end private equity fund, from capital calls through European whole-fund waterfall distributions. It is designed for readers evaluating how fund-level cash flows, management fees, carried interest and portfolio company exits combine to produce LP net IRR, DPI, RVPI and TVPI outputs. ### Fund Terms and Operating Drivers in the Template The model starts from documented fund terms: a target fund size of $500m, with LP capital at 98% and GP co-investment at 2%. It assumes a five-year investment period followed by a harvest period, with a 2% management fee on committed capital during deployment stepping down to 1.5% on invested capital net of exits thereafter. - Carried interest is set at 20% over an 8% compound preferred return with a 100% GP catch-up, using a European whole-fund waterfall. Fund-level expenses are modelled at 0.15% of fund size annually. - At portfolio company level, each of five vintage cohorts uses entry and exit EV/EBITDA multiples, EBITDA growth, LBO leverage, interest rate and hold period as its key drivers. ### How the Calculation Flow Connects Across the Model The template links assumptions to capital deployment, where annual calls are capped by uncalled commitments and management fees are calculated on the correct base period. Each vintage cohort then grows entry EBITDA, amortises LBO debt using prior-period balances to avoid circularity, and computes exit equity proceeds at its specific exit year. - Those proceeds, net of cumulative fees and expenses, feed the waterfall. The waterfall applies return of capital first, then the compound preferred return threshold on cumulative called capital, followed by catch-up and residual 80/20 splits. - LP distributions and closing NAV then drive performance metrics. This flow prevents revenue from exited cohorts from bleeding into later years and keeps the harvest-period fee base free of current-year self-reference. ### Outputs and Validation Checks the Model Produces The final performance sheet reports LP net IRR, DPI, RVPI and TVPI, alongside GP economics covering management fees and carried interest. RVPI is calculated as closing NAV divided by cumulative called capital, so it reflects unrealised positions without double-counting realised gains. - A checks sheet verifies that total called capital does not exceed commitments, that distributions reconcile to net proceeds, that NAV stays non-negative, and that TVPI equals DPI plus RVPI in the final year. These checks are structural rather than predictive, and the template does not publish sample financial results. - The public download is a values-only preview; it shows the intended calculations but does not contain live formulas or automatically recalculate. ### Practical Use and Documented Scope Practically, the template is useful for understanding how fund-level cash flows produce the J-curve profile, how vintage cohorts with independent exit timing affect NAV and distributions, and how the European whole-fund waterfall changes when carry can be distributed. It explicitly models the interaction between LBO leverage, interest tax shield via levered NOPAT, and exit proceeds. - Scenarios and sensitivity analysis are documented as omitted, and the model assumes no fund-level debt or subscription line. It does not cover subscription facilities, second-lien or PIK structures, or non-European waterfall variants. - The design is limited to a mid-market buyout fund targeting a five-vintage, ten-year structure. ## Built for fund economics Use this model when you need to forecast GP carry, LP returns, capital calls, and distributions across the full lifecycle of a private equity fund. ## Useful for fund formation and LP reporting A PE fund model helps structure fee arrangements, test waterfall mechanics, and present institutional-grade performance reporting to investors. ## Better than a deal-level model for fund work This gives you a proper fund-level framework with portfolio aggregation and LP reporting instead of a single-deal LBO structure. ## Built for fund economics Use this model when you need to forecast GP carry, LP returns, capital calls, and distributions across the full lifecycle of a private equity fund. ## Useful for fund formation and LP reporting A PE fund model helps structure fee arrangements, test waterfall mechanics, and present institutional-grade performance reporting to investors. ## Better than a deal-level model for fund work This gives you a proper fund-level framework with portfolio aggregation and LP reporting instead of a single-deal LBO structure. ## Features - **Vintage-year tracking:** Organizes investments by acquisition year to model J-curve drag and measure cohort performance independently. - **Fee and carry mechanics:** Handles management fees on committed capital, fee offsets, and carry calculations with hurdle rate thresholds. - **Distribution waterfall logic:** Calculates exit proceeds, expense paydowns, and distributions to LPs and GPs based on fund agreements. ## Use cases - **Fund closing and investor prospecting:** Model fund economics, benchmark against peer fund terms, and show projected net IRR to prospective LPs. - **Secondaries portfolio review:** Analyze fund cash flows and remaining value to support secondary sale pricing and holdco decisions. - **Fund-on-fund allocation planning:** Compare net returns and cash flow profiles across vintage funds to optimize endowment or family office allocation. ## Frequently asked questions ### What is a PE fund model? It is a model that tracks capital calls, distributions, management fees, and waterfall economics across the lifecycle of a private equity fund. ### What should a PE fund model include? It should include GP/LP waterfall logic, capital call scheduling, fee calculations, portfolio tracking, and return metrics such as IRR, TVPI, and DPI. ### Who uses PE fund models? Fund managers, GP principals, institutional LPs, fund administrators, and placement agents use them for fund structuring, reporting, and performance analysis. ### What is the difference between American and European waterfalls? An American waterfall distributes carry deal by deal, while a European waterfall requires all invested capital to be returned before the GP earns carried interest. ### Can I model management fee recycling? Yes. The model includes inputs for fee recycling and offset logic so you can see how these provisions affect the capital available for investment. ## Related templates - [Leveraged Buyout Model](https://finamodel.com/templates/lbo-model) - [Exit Waterfall Model](https://finamodel.com/templates/exit-waterfall-model) - [Continuation Fund Model](https://finamodel.com/templates/continuation-fund-model)