carried interest

[kar-eed in-ter-ist, in-trist]

noun

Finance.

1. a share of profits received by managers of private investment funds, as private equity and hedge funds, unrelated to initial money the managers may or may not have contributed.

   His piles of accumulated carried interest have fallen neatly into a tax-free loophole.

Word History and Origins

Origin of carried interest¹

First recorded in 1750–55

Example Sentences

As part of the agreement, Brookfield Asset Management is set to acquire an additional 26% interest in Oaktree’s fee-related earnings, carried interest from certain funds, and partner manager interest in 17Capital and DoubleLine, it said.

Read more on The Wall Street Journal

Brookfield Corporation is slated to acquire an additional 26% interest in Oaktree’s balance-sheet investments and the remaining carried interest.

Read more on The Wall Street Journal

Maybe like putting Medicare for 55, lowering the age, or taxing carried interest for private equity.

Read more on Salon

The ultrawealthy successfully lobbied to stop Presidents Obama and Biden from repealing the “carried interest” loophole that saves private equity executives billions by taxing their profits at lower capital gains rates, around 20 percent, instead of higher personal income tax rates, around 37 percent.

Read more on Slate

One new proposal tackles something that federal lawmakers have failed to do: closing the carried interest loophole, which allows hedge-fund and private equity executives to pay tax rates that are lower in some cases than those paid by entry-level employees.

Read more on New York Times