Calculate carried interest (carry) for private equity, venture capital, and hedge funds. Model GP/LP distributions with hurdle rates, catch-up, and waterfall structures.
Carried interest (or "carry") is the share of investment profits that fund managers (General Partners) may receive after a preferred return is met. In practice, carry is shaped by the fund agreement, the hurdle rate, catch-up provisions, fee structure, and whether the waterfall is calculated fund-wide or deal-by-deal.
This calculator is a simplified illustration of that economics. It is useful for seeing how the pieces interact, but it should not be read as a complete partnership-agreement model or a tax opinion on any specific fund.
Use this page to understand the moving parts of carry and how different waterfall assumptions change the split between GP and LP. It is a planning aid for comparison, not a definitive legal or tax model.
Hurdle Amount = Fund Size × [(1 + Hurdle Rate)^Years − 1]. Profits above hurdle are split: GP receives Carry% after catch-up provisions. LP Return = Exit Value − GP Carry. LP MOIC = LP Return / Fund Size. LP IRR ≈ (LP Return / Fund Size)^(1/Years) − 1.
Result: GP carry: ~$28.5M — LP return: $271.5M (2.71× MOIC) — LP IRR: ~15.3%
A $100M fund returning 3× over 7 years generates $200M in profit. The 8% hurdle over 7 years is $71.4M. Remaining $128.6M is split 20/80 after catch-up, yielding approximately $28.5M in carry for the GP. LPs receive $271.5M back on their $100M investment.
This worksheet is best used for comparing waterfall assumptions side by side. The output is only as good as the fee, hurdle, catch-up, and hold-period inputs you provide.
The biggest errors come from treating a headline carry percentage as the whole deal, or from assuming the same waterfall terms across different funds. Always recheck the fund agreement before using the result in a real negotiation.
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This worksheet models a simplified fund-level waterfall. It treats the entered fund size as the committed capital base, computes management fees separately, calculates a compounded preferred-return hurdle over the selected hold period, and then allocates profits above that hurdle according to the entered carry and catch-up assumptions. The sensitivity table reruns the same simplified waterfall across a fixed set of exit multiples.
It is not a legal waterfall engine. It does not read an LPA, model recycled capital, escrow clawbacks, tax distributions, deal-level timing, or every distinction between European and American waterfalls. Use it to compare broad economics, not to replace fund counsel or a binding distribution model.
Carried interest is the GP's share of fund profits after the fund agreement's preferred return and waterfall rules are satisfied. It is a compensation feature, but the exact economics depend on the contract.
The hurdle rate is the minimum return that investors typically receive before carry begins to accrue. The actual hurdle can be fixed, compounded, or otherwise structured depending on the fund.
Catch-up provisions are the mechanism that lets the GP receive a larger share of profits after the hurdle is met until the GP reaches the agreed carry split.
European waterfalls calculate carry at the whole-fund level; American waterfalls allocate carry deal by deal. The right structure depends on the fund documents and investor preferences.
Tax treatment varies by jurisdiction, fund structure, and holding period. Confirm the current rules with a tax professional before relying on any estimate.
A common headline structure is 2 and 20, but the actual economics can differ materially once hurdle rates, catch-up rules, fee offsets, and deal timing are modeled.