Carried Interest (Carry) is the portion of investment profits allocated to fund managers after returning capital to investors. Carry strongly influences timelines, risk tolerance, and exit behavior.
Typically, a fund must return the initial capital plus a preferential rate of return to the limited partner before the general partner can share in the profits. The general partner will usually receive Carried Interest equal to around 20% of the profit earned, although some successful firms can receive up to 25% or 30%.
