Get returns modeling for private credit

The only predictable feature about private credit is that deals will undoubtedly evolve. Multiple amendments, term extensions, and PIK toggles can all affect cash flows and returns. Yet, most fund managers are stuck modeling future events in Excel on a deal-by-deal basis, disconnected from the rest of the portfolio and subject to inefficient, error-prone manual intervention.

To change that, Carta is launching a returns modeling tool to help direct lenders forecast cash flows and evaluate potential outcomes. This feature is built into our Loan Operations platform, offering a forward-looking lens into performance at both a deal and fund level.

A smarter way to model outcomes

Carta’s returns modeling feature allows private credit funds to evaluate multiple outcomes across various assumptions before they happen, turning reactive work into proactive insight. 

Fund managers can use this tool to:

• Simulate future events such as prepayments, principal extensions, follow-ons, interest rate changes, and new fees.

• Understand the downstream effects of amendments before closing.

• Forecast loan-level returns and cash flows using flexible assumptions.

• Compare multiple modeled scenarios against base case terms for better decision-making.

• Group modeled deals to enable portfolio-level modeling.

• Reduce reliance on spreadsheets and close the loop between realized history and projected cashflows.

Purpose-built for direct lenders

Legacy tools weren't designed to forecast future deal and portfolio cash flows. They cater to point-in-time position tracking and often struggle to handle the bespoke deal terms, waterfalls, and return mechanics that define direct lending.

Instead of spending hours in Excel trying to understand how one deal term change might affect returns across several funds, direct lenders can leverage Carta to model scenarios at scale and answer questions like:

• What happens if our borrower PIKs 50% of interest for the next 12 months?

• How much can we improve IRR by layering a minimum interest fee?

• What is the impact of a 50 basis point decrease or increase in reference rates?

• What is the implication of assigning a first-out position at S+275 bps for cash interest while we skim the global PIK interest?

• How does a partial prepayment at 102% impact the return metrics and capital available for recycling?

• What is the trade-off between IRR and MOIC if we extend maturity but add a cash exit fee?

Shaping what's next

With the acquisition of loan operations platform Sirvatus, Carta is setting a new foundation for returns modeling and forecasting. Our product team will continue to release advanced capabilities that create value for managers across fund and loan operations.