Incentive Distribution Rights - IDRs


Incentive Distribution Rights - IDRs
These give a limited partnership's general partner an increasing share in the incremental distributable cash flow the partnership generates. This occurs alongside of per-unit distribution increases to the limited partners. The general partner's share of incremental distributable cash flow usually starts at 2% and climbs to higher levels such as 20% or 50%.

These rights are thought to motivate the general partner to rapidly grow the distributions to the limited partners. Incentive distribution rights are generally determined based on quarterly distribution figures.


Investment dictionary. . 2012.


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