Private Equity Recapitalization

[John Garner]

I am the GP of a multifamily syndication with 10 original investors. Over the last 2 years, the equity value of the original investors has risen 20%.  We are now recapitalizing and refinancing and I need to bring in new investors.  I want to make sure the original investors get the benefit of the 20% gain relative to new cash coming in.  My first approach was to increase capital contribution of the original investors by 20% in the cap table, but this is wrong and causes issues with taxes and later disbursements. How do capture the gains of the original investors without messing up the cap table?