Maybern now supports running hybrid (or deal-by-deal) waterfalls.

Under Configuration → LPA Configuration → Waterfall , users now have the option to define the fund family's waterfall to be Hybrid (Includes Deal-by-Deal) .

If the waterfall type is set to hybrid, users can then configure any individual tier in the waterfall to be calculated on a deal-by-deal basis to indicate that only cashflows tagged to investments designated as included in the waterfall (typically based on investment realization status; more on this below) will impact the amount due to the tier. A hybrid waterfall can also optionally contain tiers that are calculated on a whole-fund basis.

Each tier of the waterfall will also be linked to a configurable calculation. This calculation definition controls all of the logic behind the amount due to each tier, such as which cashflows will be included, and how the tier should calculated. For example, the tier could be calculated as a simple sum of a list of cashflows (e.g. in the case of a standard Return of Capital tier), as an IRR over time on a list of cashflows (e.g. in the case of a standard Preferred Return tier), or as a more complex set of logic that potentially combines multiple formulas (e.g. a hurdle that tests that the fund has reached a given IRR and MOIC rate).

In this initial release of Hybrid Waterfall functionality, these calculations are configured by the Maybern team based on the fund's LPA and feedback from our clients during the implementation process.

Within the Capital Activity module, after preparing a cash distribution and allowing Maybern to calculate investor-by-investor capital allocations, users will have the option to Run Waterfall in the top righthand corner within the capital event.

The Hybrid Waterfall workflow consists of two discrete input steps.

Step 1: Define which investments are required (per the LPA) to be included in the waterfall. In this initial step, users can see which investments are already included in their waterfall (based on input provided in past waterfall runs), which investments are not yet included in their waterfall, and which investments they are currently distributing for.

Users can enter either an amount or percentage of the cost basis of any investment to include the investment in the waterfall. This will include a corresponding percentage of any cashflow associated with the deal in the calculation of the amount owed to any deal-by-deal tier. For example, if the waterfall is configured to have deal-by-deal ROC and Preferred Return tiers, including 50% of Deal 1 in the waterfall will add half of all capital calls tagged to Deal 1 to the amount due to ROC, and include half of all capital activity tagged to Deal 1 in the amount of Preferred Return owed.

Step 2: Optionally include additional amounts of specific investments to include in the waterfall that you are not yet required to paydown. This step exists to help fund managers take a more conservative path if there are investments in the fund that have yet to be realized that are lower performing, in order to mitigate risk that the fund could end up in clawback.

We've made the below enhancements to waterfall output views:

We've also enhanced the more detailed waterfall breakdown table in a few ways:

Under Configuration → LPA Configuration → Waterfall , users now have the option to group commitments by investor entity for the purposes of the waterfall.

By default, all calculations in Maybern are run on a commitment-by-commitment basis. However, it may be the case that the fund wants to run the waterfall across a given investor entity's holistic position in the fund, so that any differences in cashflows or timing of cashflows doesn't result in a situation where one commitment is owed additional Preferred Return while another commitment for the same investor entity is paying Carried Interest.

When this option is on, users must also select an allocation rule that will be used to allocate any carry transactions amongst the various commitments an investor entity has in the fund.

We’ve improved the UI to provide clearer visibility and a more streamlined experience when the GP has taken more carry than the ITD waterfall supports.

Other Improvements:

Previously, Maybern did not persist each LP's allocation of credit facility transactions (these allocations were calculated "on the fly" when shown in the UI).

Now, Maybern will write transactions for each LP's allocated portion of credit facility transactions, and rebalance that activity during any subsequent closings as part of the closing flow.

We've reorganized and renamed the options under the Configuration menu to make navigation between different fund family setup options more intuitive.

To improve readability and streamline the user experience, we’ve introduced entity short names throughout the system. This update ensures that long entity names are displayed more clearly and don’t get cut off in various parts of the UI, making it easier for users to navigate and manage their data.