01
GP vs LP Return
- In a traditional waterfall structure GP’s can receive a larger share of the profits once certain performance benchmarks are surpassed.
- This structure incentivizes GPs to outperform, as the project hits certain return hurdles, GP’s have the ability to earn a larger share of the profit.
02
GP Co-Investment Strategy
- The GP Co-Investment strategy involves GPs investing alongside institutional LP investors.
- This strategy creates a new risk-return profile for GPs relative to LPs.
03
Shared Downside Risk, Greater Upside Potential
- DYP shares the same downside risk as LPs by not offering guarantees.
- By sitting pari passu with the GP and sharing in the promote, DYP has potential for much higher returns if the investment succeeds.
04
Risk-Return
Correlation
- The objective is to break away from the traditional correlation between institutional risk and return.
- Seek to increase potential returns without a corresponding rise in the risk.
