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Multiple Sources of Equity Funding


Many projects involve multiple equity partners contributing funds, and therefore requiring accurate analysis of the returns to each partner. In the recent release of Estate Master DF and DM 5.31, we introduced a new feature to help you handle these types of scenarios more effectively.

It allows the user to categorise any of the 4 Loans in the software as either an ‘Equity’ or ‘Debt’ loan via the Preferences, and then impacting the performance indicators accordingly.

EM DF Preferances Debt
Previously, it was assumed that any source of funding that was setup in either Loan 1, 2, 3 or 4 was actually always treated as ‘debt’ in relation to how KPI’s were reported in the Summary and Cash Flow tabs (such as ‘Equity to Debt Ratio’, ‘Peak Debt Exposure’, etc). So even though you may have utilised Loan 1 to structure an additional equity partner in the project, which is fine to do, their contribution would not be represented in the total project equity KPI’s such as ‘Equity IRR’ and ‘Total Equity Contribution’ and ‘Equity to Debt Ratio’. Now with this new Preference setting, you can change the loan to categorise it as ‘equity’, and therefore impact the related performance indicators.

The example screenshot below displays how Loan 1 is now categorised as ‘equity’, and along with the ‘Developer’s Equity’ contribution, calculate the results in the new column called ‘Total Equity’. The other remaining loan (Loan 4) is categorised as ‘debt’ and therefore is the only source of funding that impacts the ‘Total Debt’ column.

Returns on Funds Invested
The next screenshot below shows what outputs in the main ‘Performance Indicators’ section are also impacted by the change in loan categorisation.

Performance Indicators

Date Published: 16 Jul 2014
Category: Hints and TipsNews

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