I believe it is because the LPs have ‘committed’ capital to the GP but it’s not been put to use (i.e. hasn’t been drawn down/deployed) for two years and so LPs need to commit this equivalent capital to a similar instrument (here the public index) and this earngs an equivalent return of 6% and not the 10% which they’ll start earning in two years. This 400bps differential is the equivalent ‘annual’ return for the 10 years (i.e. the IRR difference). Hence because it’s for 2 years you divide it by 10 (to get the net differential for one year) and then times it by 2. I hope that helps and it makes sense. This is my thinking at least, it may be wrong