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Private equity⚗ Includes simulator

Carried Interest

Carried Interest is a concept that clarifies fund performance and GP/LP alignment.

Deep dive

Carried Interest helps you separate true performance, timing effects, and risk taken. Helpful formula: ARR ≈ MRR x 12 (excluding one-off revenue).

Key formula

Percentage of a fund's profits paid to GPs.

Real-world examples

PE case: Carried Interest

The investment committee compares funds with different maturity and risk profiles. Carried Interest is used as the anchor to compare conservative and ambitious scenarios.

fund_size_eur:: 320000000
tvpi:: 2.00
dpi:: 0.98
fund_life_years:: 10

Pitfalls to avoid

Judging a fund too early without considering J-curve dynamics.
Comparing multiples while ignoring time dimension of cash-flows.

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