What Is Carry (Investor Term)?
Carry, short for carried interest, is the share of a fund’s profits that investment managers receive as performance-based compensation.
Carry Meaning
The carry meaning centres on rewarding successful investing. To define carry in practice, it is typically a percentage, most commonly 20%, of the profits generated by a venture capital or private equity fund after investors have received their initial capital and a minimum return. A clear carry definition explains why fund managers are incentivised to maximise returns rather than just grow assets under management. Carry stands for performance-based upside and is a core component of how professional investors are compensated.
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