At its core, a distribution waterfall is a tiered profit-sharing arrangement that prioritises how realised gains are paid out to Limited Partners (LPs, the investors) and the fund managers. The goal is to ensure that investors get paid first, recouping their initial capital and a minimum return, before the fund manager earns a share of the profits. This structure aligns the interests of fund managers and LPs: LPs get protection and a baseline return, while fund managers are rewarded with “carried interest” (a share of the profits) only after delivering strong performance. Essentially, the waterfall is designed so that money flows through several predefined tiers until all profits are allocated. Visit Now:- https://taru.com/news-insight/mastering-private-equity-waterfall-calculations-why-every-detail-matters/