Potential Clawback Value

Once the fund gets liquidated, potential clawback value is the term used to refer to the amount of clawback payable to the General Partner. A clawback obligation is the symbol of the General Partners’ promise that during the duration of the fund, the managers will not get a bigger share of the fund’s distributions than what they have bargained for. The clawback, once triggered, will require that the General Partner give back to the fund’s Limited Partners an amount that is equal to what has been found as an excess in the distributions.

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