The Complete A to Z Guide — Strategies, Structures, and Insights
Julian R. Sterling
These are the workbooks and documents that go with the book. The four original workbooks
reproduce both worked waterfalls of Chapter 12 to the dollar, build the two capital stacks of Chapter
21, turn the performance measures of Chapter 24 and the diligence framework of Chapter 15 into working
files, and take the risk-return spectrum net of fees. Around them: three of the models with the inputs
emptied, four printable working documents, a question book that marks itself, and three cases the book
names and never takes to a number.
Free to download. No sign-up, no email address, nothing to fill in.
Eleven workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 22 September 2026.
The four workbooks
These carry the book’s own figures, so that every number it prints can be traced to a live
formula.
Download these four98 KB
Chapters 11–12
Waterfalls, promote and preferred return
Both worked examples of Chapter 12, tier by tier. The $500M fund returning $1 billion,
arriving at $900M to the LPs and $100M to the GP at exactly 20% of profit. And the
ten-investment value-add fund — seven winners at 1.8x, three losers at 0.7x, $735M of
proceeds, $235M of profit — where the catch-up clears by exactly $2 million. That $2M is
the sheet worth playing with: move the winners to 1.7x and it stops clearing entirely, which is
what the chapter means by calling the hurdle "a binary threshold". Further sheets
price the European against the American calculation on the same ten deals and size the
resulting clawback at $9M — 16% of everything the GP had already banked — build
the multi-tier structure the chapter describes, and compute the time-weighted preferred return
on the three-tranche example under both annual and quarterly compounding.
Waterfall_and_Promote.xlsx · XLSX · 26 KB
Chapter 21
The capital stack
The $56M value-add stack and the four-layer $100M development stack, both exactly as the
chapter sets them out, with the blended cost of the priority capital and what each layer
recovers across a range of exit values. A separate sheet works the leverage arithmetic in full,
from no debt to 85% loan-to-value in both directions. The chapter's 33% figure at 70% LTV is
right; the derivation printed beside it is not, and the sheet shows the working that reaches
it.
Capital_Stack.xlsx · XLSX · 22 KB
Chapters 15 and 24
Fund performance and LP diligence
IRR, TVPI, DPI and RVPI computed from one cash-flow schedule, so what each one hides becomes
visible on the same page. A gross-to-net bridge separating management fees, fund expenses and
carried interest — 2.15x gross to 1.78x net on the worked fund, and 200bps of compound
return. The J-curve, and the vintage pacing that manages it: on the same total commitment,
pacing does not shorten the J-curve, but it cuts the peak funding requirement by a third, which
is the number a treasury actually plans around. And the six-step diligence framework of
Chapter 15 as a weighted scorecard that refuses to return a recommendation while any line is
scored without evidence recorded against it.
Chapter 5 calls the four-tier spectrum the foundation of portfolio construction and
quotes every one of its return targets gross. Chapter 11 gives the fee load
for the same four tiers and notes that sophisticated LPs build comprehensive fee models.
This is that model, on the book’s own $1bn fund. The ranking survives — but the
core-to-opportunistic spread falls from 12.50 percentage points gross to 8.59 net, and the
promote, not the management fee, does more than half of that. It also finds the arithmetic
reason core funds never use the 8 per cent hurdle: a ten-year fund needs 8.97 per cent
gross to clear it, and chapter 5’s core band stops at 9. And the anchor discount that
is worth nothing: on the levered tiers the transaction fees already consume the whole
management fee, so cutting it by 25 basis points buys 30 bp of net return on core and
exactly zero on value-add. Sixty controls, all live.
The_Spectrum_Net.xlsx · XLSX · 21 KB
The same models, on your own fund
The waterfalls, the capital stacks and the fund metrics, with the same formulas and every input
emptied. Type your own fund or deal into the blue cells and the model runs.
Blank set · three workbooks
Your waterfall, your stack, your fund
The European and American waterfalls, the multi-tier promote and the time-weighted pref; the
value-add and development stacks, the leverage ladder and the mezzanine against preferred equity;
the four performance measures from one cash-flow schedule, the gross-to-net bridge and the
thirty-two-line manager scorecard with its weights. Each workbook closes on a checks sheet that
counts the inputs still empty and runs the tests that hold on any fund: every dollar distributed
once, sources equal to uses, layers that add to the cost, TVPI equal to DPI plus RVPI, scores
between 1 and 5.
Put the book’s inputs back, listed in the archive, and the book’s figures come back
with them: 900 and 100 on the Chapter 12 fund, 56 of uses on the value-add stack, a TVPI of 1.97x.
Five pages to print and take into a meeting. A4, with margins wide enough for US Letter.
Chapters 10, 11, 15, 18, 21 and 24
Four working documents
The manager selection scorecard of Chapter 15, thirty-two lines in six steps, each with a score,
a weight, an owner and the evidence. An LPA and fee terms review: every economic, protective and
liquidity term against market and against the fund’s own position. A deal underwriting
one-pager: sources and uses, the yields that pay for the stack, and a blank exit-cap sensitivity
grid. And a sheet for reading a quarterly fund report: the four measures, the share of value still
unrealised, and the gross-to-net bridge since inception.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Thirty-one numerical, nine multiple choice
The numerical questions work the book’s own figures: both Chapter 12 waterfalls and the
clawback between them, the time-weighted pref, the Chapter 21 stacks and the leverage ladder, the
Chapter 24 measures and the gross-to-net bridge, and the spectrum net of fees. They are marked
against a tolerance, so a reasonable rounding passes. The score sheet counts the wrong answers by
part of the book, which gives the only revision list worth having.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for
each answer.
New material, not a restatement. Three situations the chapters name in passing and never take to
a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a
checks sheet closes it. Type your own figures in and every finding recomputes.
Case one · extends the Chapter 12 waterfall
The catch-up at the edge
The ten-investment fund clears its full catch-up by 2.5 of proceeds: at a loser multiple of
0.683 instead of 0.7 it would not. At 0.6 the fund loses 15; the GP loses 13 of it and the LPs 2.
Inside the catch-up zone the LPs receive their capital and pref whatever happens and the GP is the
first-loss holder of the last 46.5 of profit. With a 50 per cent catch-up the GP’s 47 would be
24.5, with none 9.8.
Case two · extends open-end funds in Chapter 9
The gate
A tenth of an open-end fund asks to leave while others queue too. A third is paid in the first
quarter, 87 per cent within a year, the last units in the sixth quarter. Waiting in the queue costs
2.6 points on top of the fall in NAV; paying everyone at once would have cost the investors who stay
1.8 per cent. A gate does not remove the cost of liquidity; it decides who pays it.
Case three · extends pacing in Chapters 8 and 24
Pacing to a target
A flat 350 a year, one fund a vintage, reaches an 8 per cent allocation in year 5, then overshoots
to 12.8 per cent in year 8 as the early funds keep drawing. The steady commitment that holds the
target once the programme is mature is about 220. Net cash flow stays negative for seven years.
Steady pacing smooths vintage risk; it does not produce a steady allocation.
The first worked example in Chapter 12 prints, at Step 4, "remaining $750M – $200M
– $50M = $250M". The residual is right — $1,000M less $500M of capital, $200M
of pref and $50M of catch-up does leave $250M — but the line as set does not compute:
the first figure should be $500M, and $750M – $200M – $50M is $500M, not $250M.
The final tally in the book is correct and unaffected. The workbook derives each tier from the
one above it, so the residual falls out of the arithmetic rather than being asserted.
Reader list
Optional. One email when a companion file is corrected or a new worked case goes up, and a short note when a new book comes out. Nothing on this page needs it.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. They use
no macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks
to update links on opening, decline — there are none.
What changed, and when
22 Sep 2026
Blank model set, four printable working documents, the question book
and three new cases added. Verdict cells that read “ECART” or “TOUT
CONCORDE” now read GAP and ALL AGREE; no figure changed. Read-me rewritten.
Articles on this book
Two of the calculations in these workbooks, worked out in full.
All articles.
Why a promote stops clearing at the hurdleA fund clears its catch-up by $2m. Move the winners from 1.8x to 1.7x and the promote does not shrink by a fifth. It goes to zero.
Also by Julian R. Sterling
The other books with companion files. The full list of titles is on the
author page.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
The CBAM Compliance HandbookWhat 2027 really costs, how big the buffer should be, and the term the surrender formula counts twice.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Distressed Debt InvestorWhere the fulcrum security actually breaks, and what an 80-cent recovery is worth once composition and time are priced.
The Real Estate Debt InvestorThe margin against the return on capital, the floor priced, and what prepayment protection buys.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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