A Practitioner’s Guide to Commitments, Cash Flows, and the Return That Reaches the Investor
Julian R. Sterling
These are the companion files of Alternative Investments by Julian R. Sterling.The book on Amazon →
The four Excel workbooks that go with the book, with their checks tightened until they can catch something:
every figure the book prints is reproduced by a live formula, and 254 controls, each to half a unit of the
last printed digit, end on ALL OK. Around them: the same four models with the inputs emptied, thirteen working documents
to print, forty questions that mark themselves, and three cases the book names and never takes to a number.
Nothing is locked, protected or watermarked.
Free to download. No sign-up, no email address, nothing to fill in.
Twelve workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 24 September 2026.
Get an email if these files are corrected
Optional. When a workbook on this page is corrected or a new worked case goes up, readers on the list get one email, plus a short note when a new book comes out. The downloads do not need it.
These carry the book’s own figures. Each now closes on a checks sheet that passes only to the last printed digit,
and gains a sheet computing what the chapters state without showing the working.
Download these four117 KB
Chapters 1, 4, 8 and 11
Thornbury — the three returns
The fund's internal rate of return of 13.2935 per cent, the sleeve with the
uncalled commitment held in the listed index at 9.1878, the sleeve with it
held in cash at 6.2571, and the index itself at 7.1312
— all four computed from one call and distribution schedule.
The apparent advantage of 6.1624 points, the real one of 2.0567, the
33.3744 per cent that reached the foundation and the ratio of 3.00 are live cells.
Underneath sits the engine the other three workbooks share: the fund's net flows, the sleeve
account on both idle policies year by year, the cumulative capital at work, and the
compounding factors. Set the cash row equal to the index row and watch the fund's return
refuse to move while the sleeve returns converge — the whole of Chapter 9 in one edit,
and worth 2.9307 points a year.
New: the residual on one date. The IRR puts it beside the last distribution; the sleeve and the
PME put it a year later. On one date throughout the IRR is 12.9426 and the apparent advantage is
2.83 times the real one, not 3.00. And the 21.00 advisory layer the fee chapter
counts, which the sleeve account never charges: net of it, the sleeves return 8.9657 and 6.0248.
The shape of the programme rather than its return. TVPI 1.6560x, DPI
1.4025x, RVPI 0.2535x, and the share of the multiple already banked. Then
the J-curve as a computed row rather than a picture: 90, 240, 349, 383, 306,
154, 21, −74, −160, −227.
And the arithmetic that belongs in every allocation paper and appears in almost none. A
commitment of 600 never put more than 383 to work, so
36.1667 per cent of it was never invested at any moment, and holding the
target genuinely invested would have required committing 939.95 — an
over-commitment of 56.6580 per cent. The ratio is a property of your own schedule, and the
sheet recomputes it when you type one in.
New: the rates a multiple implies (1.6560x stops beating the index at 7.32 years, not
a shade under seven), the slow-exit peak of 535, the 939.95 schedule and the denominator effect
(40.90 per cent if no distribution arrives with the Year 5 call, 27.87 if they do), and the
timing experiments of Chapter 4. Corrected: 258 had come back by the end of Year 5, not 291.
Every capital call treated as a purchase of the index and every distribution as a sale, both
compounded to the same date: 979.96 against 1,230.20, a
Kaplan-Schoar ratio of 1.2554x and a direct alpha of 5.8628 per cent. The
manager did beat the index on the capital it used, and the workbook says so.
Then the comparison that is usually skipped. A private equity portfolio is a levered equity
portfolio, so the sheet builds an index levered to a beta you set — at 1.15 it returned
7.8203 per cent a year rather than 7.1312 — and the ratio falls to
1.2255x. Change the index series entirely and watch the answer move: the
choice of benchmark is a decision, and this is where it becomes visible.
New: the benchmark at a beta of 1.30 computed year by year (8.4883 per cent, PME 1.1976), the
leverage funded at the cash row and at 3.00 per cent (the PME moves by 0.0070), and the direct
alpha against the levered index that Chapter 7 declines to compute: 5.2448 per cent.
The first-order autocorrelation measured from the reported series —
0.5245, which a listed index does not do and an appraisal series does
— and the standard correction reversed across the whole range of coefficients. The
sleeve's volatility goes from 3.1547 to 5.4849 per cent, its correlation
with the index from 0.0707 to 0.3098, and its beta from 0.0215 to
0.1639: seven and a half times, on the number an allocation model is solved
on. Portfolio volatility barely moves, so the diversification case survives; the sheet shows
both so you can say which is which.
Then the load in money — management fees 55.56, carried interest 92.50, the advisory
layer 21.00, 169.06 against a net gain of 370.00, which is
45.6926 per cent — and the secondary market: what a discount on the
residual does to the sleeve's ten-year return, run from nothing to giving it away.
New: the smoothing table across coefficients 0.00 to 0.60, with the printed 5.4849 and 81.9603
traced to the measured coefficient before rounding, and a roll-forward showing the ten reported
returns are a series of marks rather than the fund’s own path (they leave 64.44, not 143).
Corrected: 94.49 per cent of the management fee falls in the first five years,
not two thirds; a 30 per cent discount costs 0.3286 points a year.
The four workbooks with every input emptied. The checks count what is still missing and test what holds for any inputs.
Chapters 1 to 15
Your schedule, your index, your fees
The three returns, the cash-flow engine, the public market equivalent and the smoothing, fee and exit workbook, with the same formulas and every blue input emptied. Cell B3 of the Inputs sheet counts what is still missing, and every result stays empty until nothing is.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: 13.2935 per cent for the fund, 9.1878 and 6.2571 for the sleeve, 1.2554x for the PME.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 2 to 18
Thirteen working documents
The commitment minute, with the three decisions a vote contains. The drawdown and liquidity schedule, with the slow-exit test. The sleeve account in ten lines. The three returns on one page, with the ladder of gaps. Where the uncalled commitment lives, as the paragraph for the investment policy statement. Over-commitment and the denominator stress. Reading a fund’s numbers, from DPI to the PME worksheet. The benchmark and its gearing. The valuation tests and the risk page. The fee load in money, with the three meanings of invested capital. A secondary indication, priced. Choosing a manager. And the ninety-second test for a commitment paper, with the five pages of a board pack.
Each page carries the Thornbury figures in a footnote, so that a filled-in page can be checked against the book.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Seven on the commitment and its cash flows, eight on measuring the fund, seven on the return that reaches the investor, eight on valuation, smoothing, fees and the exit, four on practice, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
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 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.
Chapter 9 · Case one
Where the uncalled commitment lives: the two places the book does not price
Chapter 9 prices cash and the listed index and stops. The liquid proxy, the index levered to 1.15, returns 9.6425 per cent; a credit facility at the chapter’s own cash plus 150 basis points returns 9.9603, but its balance, once the interest is counted, peaks at 407.38, not the 383 the chapter says, and ties with the index policy only at about 5.19 points over cash. And the chapter’s worst case, the -11.20 year moved into the heaviest call year, raises the index-policy sleeve to 9.7777: the balance it hit in Year 8 was larger.
Chapters 3 and 10 · Case two
Committing 939.95 on a slower schedule
Chapter 10 sizes the over-commitment on the book’s schedule; Chapter 3 builds the slower one. Together: two years of delay put 838.12 to work at the peak, 41.9 per cent of the endowment against a target of 30, and a 20 per cent listed fall that year reports the sleeve at 47.4 per cent. The commitment that would have been right on the slow schedule, 672.90, holds only 71.6 per cent of the target if the distributions come on time after all. The ratio is a bet on the overlap.
Chapter 14 · Case three
Three meanings of invested capital
Chapter 14 says the fee base after the investment period has three current meanings and computes one. On the cost of unrealised investments the management fee is 69.03; on called capital never reduced, 101.85, against the book’s 55.56. Carry falls a fifth of the difference, and the index-policy sleeve falls to 8.8252 per cent: 0.36 of a point a year from one definition in one clause.
an input cell; everything else on the sheet is a formula
Black text
a formula — do not overtype these
Checks sheet
the printed figure beside the computed one, to half a unit of the last printed digit; the sheet ends ALL OK
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Why the checks matter more than the models
A workbook that agrees with a book proves nothing on its own — the author wrote both. What
the Checks sheets do is different: they force the model to reproduce a number that was printed
before the model existed, from a formula rather than from the number itself.
On this book the discipline caught a timing convention rather than an arithmetic slip, which is
the harder kind to find. The fund's internal rate of return depends on when the residual value is
struck: at the last reporting date it is 13.2935 per cent, and dated a year later
it is 12.9426. Neither is wrong and the difference is not small. The convention
is now stated once in the fact pattern, carried in the appendix of the printed book, and
reproduced in the workbooks so that a reader can switch it and see the effect.
The first checks allowed half a percentage point of error on a return, which is enough to pass
almost anything. At half a unit of the last printed digit they find what the book states and does
not show: that the 3.00 mixes the two dates for the residual (2.83 on one date), that the
sleeve account leaves out a fee the book counts, and a handful of figures computed from rounded
inputs. The Checks sheets name each one beside the book’s figure.
Where a shortcut and the full computation disagree, both are shown. The apparent advantage is
6.1624 points on the unrounded series and 6.1623 if you subtract the printed returns; the risk
reduction is 2.9836 points as claimed and 2.4454 once the valuations are unsmoothed. Neither gap
is smoothed away.
Go beyond the companion files
Alternative Investments develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF
prints on A4 or US Letter. 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
24 Sep 2026
The four workbooks’ checks tightened from half a point to the last printed digit: 254 controls, each workbook ALL OK. On one date for the residual the apparent advantage is 2.83 times the real one, not 3.00; net of the advisory layer the book counts, the sleeves return 8.9657 and 6.0248. Corrected: the TVPI crosses the index at 7.32 years, not under seven; 258 returned by Year 5, not 291; 94.49 per cent of the management fee in the first five years, not two thirds. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
What is a good TVPI for a private equity fund?One that beats (1 + benchmark)^years over the time money was out: 1.6560x over an effective 4.04 years beats an index's 1.3210x; over nine it loses.
What is the duration of a private equity fund?About half its legal life. An illustrative 10-year buyout fund holds money for 5.04 years on average, so its 1.89x multiple is roughly a 13.5% IRR.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
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 Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
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.
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.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
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.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
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.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
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.
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.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
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 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 Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
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.
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.
If this book helped — or didn’t — a few lines on Amazon are worth more than they look: they are what the next reader goes on. Write a review. The workbook stays free either way.