What is distribution waterfall?
The contractual order in which cash is distributed among investors and the sponsor: typically return of capital, preferred return, GP catch-up, and the residual promote split. It determines how the deal’s profits are actually divided.
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.