What is American waterfall?
A deal-by-deal waterfall in which the GP earns promote as each investment is realized, before whole-fund results are known. Usually paired with a clawback, escrow, or holdback to protect LPs.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.