Measure value drivers like EBITDA Growth and Multiple Expansion in the Net Return domain, after the impact of GP Management Fees, Fund Expenses, and Carried Interest.
Module Category: Fees, Expenses, Carry, and FX
Key Concept: Value creation measurements typically combine to provide an individual investment’s gross return, which excludes the impact of management fees, fund expenses, and carried interest. However, the value creation math can also be used to attribute to each deal its appropriate pro-rate share of the fund’s fees, expenses, and carry, so analysts can measure value drivers on a net-to-LP basis.