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Carried Interest Formula

What is the formula for Carried Interest?

carried interest is taken out before distributions to the chumps... (LPs)

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10m x .25 = 2.5m

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depends on the method. For a hurdle rate, you have to determine the IRR of the investment and if it exceeds that, then you calculate the carried interest on profit. It's always based on NAV before distributions. Another method is deal by deal which they receive CI on every deal and could potentially pay a clawback, or through the method in the book (which is based on predistribution NAV exceeding either commitments or paid-in capital).

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