Fees & Economics
What is Carried Interest (Carry)?
Carried interest, or "carry," is the share of a fund’s profits paid to the general partner as performance compensation — most commonly 20% of gains above a hurdle rate.
Carried interest is the GP’s share of the profits a fund generates, and it is the primary upside in fund economics. The market standard is "2 and 20" — a ~2% management fee and ~20% carry — though terms vary by strategy and manager reputation.
Carry is usually only paid after LPs receive their capital back plus a preferred return (the hurdle). A "clawback" provision can require the GP to return excess carry if later losses mean it was overpaid.
Also known as: carry