Unlock the complexities of private equity and venture capital fund distributions with our free Carried Interest Calculator. Quickly estimate the General Partner's profit share, often known as 'carry,' based on invested capital, total distributions, preferred return, and carried interest rates. Essential for fund managers, limited partners, and investors.
Formula:
To calculate Carried Interest (CI), follow these steps:
Variables:
C: Initial Invested CapitalD: Total Distributions (Gross Return)PR: Annual Preferred Return Rate (as a decimal, e.g., 0.08 for 8%)CIR: Carried Interest Rate (as a decimal, e.g., 0.20 for 20%)Y: Years Invested
- Total Preferred Return Amount (PRAM):
C × ((1 + PR)Y - 1) - Total Return for Limited Partners Before Carry (LP_Before_Carry):
C + PRAM - Profits Eligible for Carried Interest (Profits_Eligible):
D - LP_Before_Carry - Carried Interest (CI): If
Profits_Eligible > 0, thenProfits_Eligible × CIR; else0