PE Glossary
Carry (Carried Interest)
Carry · The share of a fund's profits allocated to the General Partner, typically 20% of gains above a preferred return (hurdle rate). Carry aligns GP incentives with LP returns.
Example
A €1B fund returns €2B to LPs above its 8% hurdle rate. The €1B excess generates €200M in carried interest for the GP (20% carry), with the remaining €800M distributed to LPs.
Related terms
Put Carry in context
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