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Excel Formula - Creating Profit Splits

  1. #1
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    Excel Formula - Creating Profit Splits

    Hello,

    I'm trying to create a formula, macro or whatever is needed to create this profit split for an investment.

    • 9% Preferred Return to the Sponsor
    • Profit Split (Waterfall #1): 75% Investor / 25% Sponsor (until Sponsor achieves a 20% IRR)
    • Profit Split (Waterfall #2): 50% Investor / 50% Sponsor thereafter

    The 9% is easy, but then went it gets to creating what is needed for the sponsor I'm stuck. I've attached a copy of an example to where I get stuck and cannot move past it. Please let me know if anyone knows how to formulate or if more information is needed.

    Thank you. File1.xlsx

  2. #2
    Forum Expert DGagnon's Avatar
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    Re: Excel Formula - Creating Profit Splits

    i took a look at your sheet, but im a bit confused as to what number to be using for this formula. can you indicate what numbers are to be used for the formula?
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  3. #3
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    Re: Excel Formula - Creating Profit Splits

    Basically I'm trying to take cell G18 to pay 25% to the sponsor until the IRR (B20) reaches 20%. Cell G18 is comprised of G12 times C6 and the IRR is comprised of row 19. Once the 20% in B20 is reached I then want the remaining to cash from cell G12 to go be split 50%.

    G18 X 75% until IRR(B19:G19) = 20%, then
    G18 X 50%

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