To use the carried interest calculator, input the fund size, hurdle rate, carried interest rate, fund return, GP commitment, and investment multiple. The calculator will compute the carried interest, total return, and distributions for both general and limited partners.
Total Return = Fund Size × Fund Return
Hurdle Amount = Fund Size × Hurdle Rate
Profit Above Hurdle = Max(0, Total Return - Hurdle Amount)
Carried Interest = Profit Above Hurdle × Carried Interest Rate
GP Carry = Carried Interest × GP Commitment
Total Distributions = Total Return + Carried Interest
LP Distributions = Total Distributions - GP Carry
Limited Partners' Return = Total Return - Carried Interest
Consider a fund with a size of $100 million, a hurdle rate of 8%, a carried interest rate of 20%, and a fund return of 15%. The GP commitment is 2%, and the investment multiple is 2. The calculator will determine the carried interest and distributions accordingly.
Carried interest calculations can vary based on fund agreements. Always consult with a financial advisor for specific fund structures. This calculator provides a general estimation and should be used for educational purposes.
Explore other calculators like the Investment Calculator and the ROI Calculator for more financial insights.