Carried Interest – Unique Considerations

When it comes to estate planning and valuation of alternative asset management firms and carried interests, fund principals are wise to choose their advisors carefully.  Carried interest, also known in some segments as a promote, performance fee or profits interest, is the dominant incentive mechanism for general partners and managing members of hedge funds, private equity vehicles and venture capital firms. 

Carried Interest often fits the profile of an asset with significant growth potential, making it a serious candidate for use within an estate plan.

MPI is also engaged regularly to help private investment firms establish values for the equity of their management firms, whether that be in the context of admitting a new partner, buying out a partner, or selling a stake in the firm to an investor.

MPI produces fair, logical and reliable alternative asset management and carried interest valuations by leveraging its years of project experience that includes hundreds of firms, all segments of the alternative asset management industry, various estate planning techniques and all relevant valuation methods.

MPI is well versed in the methods that should be considered or often come into play in carried interest valuations:

  • Discounted Cash Flow
  • Scenario Analysis / Monte Carlo Simulation
  • Option Pricing
  • Public Company and Acquisition Multiples
  • Section 2701 / Vertical Slice Transfers
  • Alternative Transfer Techniques
Contact one of our Valuation Experts

Contact us to inquire about a carried interest valuation or to learn more about what MPI can do for you:

Direct Contact:
Todd G. Povlich, CFA, ASA
212-390-8310 | tpovlich@mpival.com
Read MPI’s Carried Interest Primer from Trust & Estates Magazine

Learn more about the many considerations involved in carried interest planning...

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