carried interest

American  

[kar-eed in-ter-ist, in-trist] / ˈkær id ˈɪn tər ɪst, ˈɪn trɪst /

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.

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Etymology

Origin of carried interest

First recorded in 1750–55

Example Sentences

Generally, they carry expensive fees, including 10% or more upfront management fees and 20% carried interest on any gains, according to Nasdaq Private Markets.

From MarketWatch

In 3Q, 21.2% of outstanding mortgages carried interest rates of 6% or higher, edging past the 20% share with rates below 3%.

From The Wall Street Journal

Carried interest, or “carry,” refers to the share of a fund’s profits—typically 20%—that goes to managers.

From The Wall Street Journal

But stake sales “also comes with things that are not that attractive to the GPs,” including reduced fee revenue and carried interest, and “some constraint on your flexibility” regarding firm strategy, he said.

From The Wall Street Journal

They are worried about when and if their carried interest, or “carry”—pay tied to the performance of their deals—will materialize.

From The Wall Street Journal