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

Some platforms that target retail investors offer SPVs with management fees or upfront commissions of 10% or more, plus 2% annual fees and 20% carried interest on any gains, according to Nasdaq Private Market.

From MarketWatch • May 13, 2026

But the Joint Committee previously estimated that taxing carried interest as income would raise $63.1 billion over a decade, and that cracking down on derivative contracts could raise $16.5 billion in that time frame.

From Barron's • Apr. 22, 2026

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 • Nov. 20, 2025

That’s set to give Brookfield an additional 26% interest in Oaktree’s balance-sheet investments and the remaining carried interest, and BAM a further 26% interest in Oaktree’s fee-related earnings.

From The Wall Street Journal • Nov. 13, 2025

At that time there were outstanding one hundred and ninety-four million ten-forty United States bonds that carried interest at the rate of five per cent.

From Reminiscences of Sixty Years in Public Affairs, Vol. 2 by Boutwell, George S.