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Definition of 'Distribution Waterfall'
The order in which a private equity fund makes distributions. A distribution waterfall is a hierarchy delineating the order in which funds will be distributed, and may ensure that different types of investors have priority of payment compared to others within the same fund.
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Investopedia explains 'Distribution Waterfall'
A distribution waterfall describes the method by which capital is distributed to a fund’s investors as underlying investments are sold. It specifies, for example, that an investor will receive his or her initial investment plus a preferred return before the general partners can participate in the profits. Such an arrangement can increase the investor's confidence in the equity fund and its potential profitability for them.
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Search results for 'Distribution Waterfall'
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http://stocks.investopedia.com/stock-analysis/2010/Tap-Into-Profits-With-Water-Investments-MWA-TMO-CWCO-WTS0413.aspx
... CWCO) develops and operates seawater desalination plants and water distribution
systems in ... resource in your portfolio can result in a waterfall of potential ...
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