What is GP catch-up?
A waterfall tier that gives the GP a larger share (sometimes 100%) of distributions after the preferred return is paid, until the GP has “caught up” to its negotiated profit split. Optional and highly negotiated.
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.