Waterfalls and Promotes · Part of the EiP Academy

Mastering Waterfalls and Promotes

Split profit between investors and partners, from preferred return to promote, with waterfalls built step by step in Excel.

Advanced

9 CPD hours

about this course

Split the profit, step by step

This course explains how a waterfall and promote structure works, then builds one in Excel: equity contributions, return of equity, pari passu distributions and each hurdle.

You model IRR, equity multiple and combined waterfalls, add a catch up, and compare promote terms to see what each structure means for each partner.

Who this course is for

Analysts working on joint ventures and funds

Investment and asset managers

Acquisitions professionals

Finance professionals who review partner returns

Candidates preparing for senior modelling tests

Anyone asked to build or check a promote

What you'll end up with

This is what you'll learn to do

By the end of the course, you will be able to build a waterfall from the terms of a deal and explain who gets what.

  • Set up equity contributions and return of equity

  • Build IRR hurdle waterfalls

  • Build equity multiple and combined waterfalls

  • Add a catch up to the structure

  • Compare promote terms to see how they change each partner's return

What you will learn

Skills you can use at work straight away

  • Waterfall structure

  • Equity contributions

  • Pari passu distributions

  • IRR hurdles

  • Equity multiple hurdles

  • Combined hurdles

  • Catch up

  • Comparing promote terms

Practical examples

Excel examples and downloadable files to work through.

Supporting materials

Everything you need alongside the lessons.

Academy access

Included in the EiP Academy, with future updates while your membership is active.

Want more than one course?

Get all our courses in the EiP Academy

All of our courses, the EiP Model Library and a community of property professionals, in one membership.

FAQs

What is a waterfall in real estate?

A waterfall sets the order in which profit is shared between investors and partners. Each tier, or hurdle, has its own split, so the share changes as returns rise.

What is a promote?

A promote is the extra share of profit the sponsor or operating partner earns above its own equity once the investors have reached an agreed return, such as a preferred return.

Do I need to understand IRR before taking this course?

A basic understanding helps, because the hurdles are built on IRR and equity multiple. Excel Foundations covers IRR and XIRR if you want to start there.

How long will I have access?

You have unlimited access for 12 months, in line with the EiP Academy, which is a 12-month programme. Nothing renews automatically, and you can renew when the period ends.

Do I get instant access?

Yes. Access is sent to you by email as soon as your order is confirmed.

Is this course included in the EiP Academy?

Yes. It is included in the EiP Academy, together with the other courses, the EiP Model Library and a community of property professionals. If you want more than one course, take a look at the Academy.

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