Distribution Waterfall

The order in which a private equity fund makes distributions. A distribution waterfall is a hierarchy delineating the order in which funds will be distributed, and may ensure that different types of investors have priority of payment compared to others within the same fund.

A distribution waterfall describes the method by which capital is distributed to a fund’s investors as underlying investments are sold. It specifies, for example, that an investor will receive his or her initial investment plus a preferred return before the general partners can participate in the profits. Such an arrangement can increase the investor's confidence in the equity fund and its potential profitability for them.


Investment dictionary. . 2012.

Look at other dictionaries:

  • waterfall provision — USA waterfall provision; waterfall Priority based formula for the determination of distributions or allocations between or among equity or debt holders. For an example of a waterfall provision in project finance transactions, see Project Finance… …   Law dictionary

  • waterfall — USA waterfall provision; waterfall Priority based formula for the determination of distributions or allocations between or among equity or debt holders. For an example of a waterfall provision in project finance transactions, see Project Finance… …   Law dictionary

  • distribution — dis·tri·bu·tion /ˌdis trə byü shən/ n 1: the act or process of distributing: as a: the apportionment by a court of the property and esp. personal property of an intestate among those entitled to it according to statute compare descent, devise …   Law dictionary

  • waterfall — The contractual distribution of principal and interest cash flows in a multi tranche security such as an ABS, CMO or CDO. The contractually specified allocation of cash to debt holders and other parties. The priority of payments to holders of… …   Financial and business terms

  • Umaldy Theodore Waterfall — (* 13. August 1910 in Frederick (Oklahoma); † 27. Oktober 1971 in Stillwater (Oklahoma)) war ein amerikanischer Botaniker. Sein offizielles botanisches Autorenkürzel lautet „Waterf.“. Waterfall erhielt 1935 seinen Titel als B.Sc. von der Oklahoma …   Deutsch Wikipedia

  • river — river1 riverless, adj. riverlike, adj. /riv euhr/, n. 1. a natural stream of water of fairly large size flowing in a definite course or channel or series of diverging and converging channels. 2. a similar stream of something other than water: a… …   Universalium

  • Prokletije — Albanian: Bjeshkët e Namuna/Alpet Shqiptare Range …   Wikipedia

  • Shaw and Crompton — Coordinates: 53°34′37″N 2°05′31″W / 53.577°N 2.092°W / 53.577; 2.092 …   Wikipedia

  • Iguazu Falls — as seen from a helicopter Location Iguazu Falls, Misiones, Argentina Paraná (state), Brazil. Coordinates …   Wikipedia

  • Italy — • In ancient times Italy had several other names: it was called Saturnia, in honour of Saturn; Enotria, wine producing land; Ausonia, land of the Ausonians; Hesperia, land to the west (of Greece); Tyrrhenia, etc. The name Italy, which seems to… …   Catholic encyclopedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.