Carried Interest Calculation only, capital, interest, receives, carried

BC_MBA_student

In the example in Section 4 of Reading 49, it says, that the Carried Interest is calculated based on the total return method and on the first alternative of this method (GP receives only carried interest if fund has returned entire committed capital to LPs). Looking at the calculation on page 76, carried interest is paid when NAV exceeds committed capital. Is that correct?

Many thanks.

yospaghetti

Yes carried interest is paid only when the NAV before distributions exceeds comitted capital.

CPATrader

And the only trick there is sometimes carried interest could be on all committed capital, and other times it could be deal by deal committed capital. That will be clear in the vingette, and I not clear, go with on all committed capital