economicz

can anyone confirm how carried interest is calculated?

say the hurdle rate is 8% and the incentive fee is 20%, and the fund earns 10% in reality. since actual return > hurdle rate, the GPs are eligible for carried interest. do the GPs earn 20% of 2% (difference between actual results and hurdle) or 20% of 10% (actual return)?

i know how this works in real life (usually with a true up period to get to 80/20) but not sure how it works in CFA land.