Glossary
European waterfall (whole-fund)
A distribution waterfall in which the GP receives carried interest only after LPs have received all contributed capital plus the preferred return across the whole fund.
In practice
It is more LP-friendly and is the norm in many institutional buyout funds. The GP waits longer for carry but clawback exposure is much lower.
In FUN/D
FUN/D models whole-fund waterfalls to the LPA's definitions; see the worked example in our waterfall guide.
Related: American waterfall · Distribution waterfall · Preferred return · full glossary
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