Fund economics
Carry economics. Examined.
CarryBeast is a reference for the people who decide, model or argue over how a fund's money is divided: what carried interest is owed, through which waterfall tiers, on what fee base, under whose vesting and clawback terms, and what the revenue code leaves behind. Organized on the economics themselves — not on the process of running a distribution, and not on the software anyone is selling.
Who this is for
GPs, LPs, CFOs and fund counsel modeling or negotiating the money split
Who it is not for
Not written for someone running a distribution, drafting the LP notice, or managing the operational calendar around a payment. If your question is when the wire goes out and who is told, a sibling property owns that seat — this one covers what the number should be and how it was negotiated. It is also not written for someone raising a fund or operating a portfolio company; the people inside the businesses a fund owns are portfolio company management teams, and they are written about as such.
253
Entities published
of 275 in the graph. The other 22 carry no authoritative source and do not render.
12
Corrections
claims published elsewhere that a primary source refutes, 4 of them load-bearing.
68
Questions answered
of 68 answerable, from 95 observed in live People-Also-Ask boxes. None were invented.
13
Market phrases labelled
defined because readers meet them, with no citation attached to the phrase itself.
Three things the field publishes backwards
Three claims about fund economics are published almost everywhere, and all three are wrong. Each is refutable from a primary source — a statute, a regulation, a circuit court opinion or a standard-setter's own document — and each is the kind of distinction that decides whether the rest of a page can be trusted. They are the first thing on this site because they are the reason to prefer it.
Published everywhere
The 2023 SEC Private Fund Adviser Rules impose live obligations on managers.
What is actually true
They were vacated in their entirety by the Fifth Circuit on 5 June 2024. The quarterly statement rule, the restricted activities and the preferential treatment limits are not in force. The vocabulary entered the market and belongs in a glossary — labelled as vacated, which is how it appears here and not how it appears in the competitor pages still describing it as current compliance.
Sources: sec-pfar-final · napfm-v-sec · sec-pfar-pr
Published everywhere
The management fee offset is "typically 80% to 100%".
What is actually true
It is 100%. Every authoritative source — ILPA's prescriptive principles and its empirical survey of market terms alike — points to a full offset. An 80% offset is legacy or off-market, and quoting the range as though both ends were standard understates what a limited partner should be asking for.
Sources: ilpa-principles-3 · ilpa-fund-terms-2021
Published everywhere
Excluded QSBS gain is an AMT preference item, creating double-taxation exposure.
What is actually true
Wrong for stock acquired after 27 September 2010. Section 57(a)(7)'s add-back is limited by its own terms to earlier stock, and excluded gain sits outside the net investment income tax as well. The portion that is not excluded is 28%-rate gain rather than 20%, which is the detail most summaries also get wrong.
Sources: irc-57 · irc-1411 · wilmerhale-qsbs
Where the money is decided
Five pillars, built on a typed entity graph rather than on a list of article ideas. Every page is a projection of that graph, every claim resolves to a source in a citation library assembled before any of it was written, and a node with nothing authoritative behind it does not render at all — which is why some sections here are shorter than a competitor's and why the gaps are labelled instead of filled.
Carry Mechanics
How carried interest is defined, sized, timed and governed: carry level and basis, carry on net versus gross profits, realized versus unrealized gains, crystallization, carry points, and the key-person and removal provisions that decide who keeps it.
22 entries
Distribution Waterfall Modeling
The arithmetic of a distribution waterfall: typology and tier order, preferred return and hurdle, GP catch-up, whole-fund versus deal-by-deal, and the fund-level metrics — TVPI, DPI, RVPI, NAV — a waterfall is computed against and measured by.
62 entries
GP Compensation and Benchmarks
How carried interest is divided inside a general partner: the carry pool, points allocation across the team, profits interest units, the manager entity stack, and the hedge fund constructs that sit alongside them.
7 entries
Vesting, Clawback and Alignment
The provisions that govern who keeps carried interest: vesting schedules and leaver terms, the general partner clawback and how it is computed, escrow and holdback arrangements that secure it, and limited partner giveback obligations.
42 entries
Fee Structures and Fund Economics
What the fund charges and what survives tax: management fee basis and step-downs, the fee offset, fund expenses and reporting standards, side letters, and the tax treatment of carried interest under Section 1061, the profits-interest rules and Section 1202.
120 entries
Glossary
The vocabulary of carry, waterfalls, vesting and fund tax — each entry resolving to a primary source, and market phrases labelled as market phrases.
What this site will not tell you
Where a mechanic is documented and the specific number is not, this site publishes the mechanic and refuses the number. The compensation pages are the clearest case: the surveys that would carry credible carry-pool and points figures have not been retrieved, so no figures appear, and the nodes that would hold them are marked in the data rather than quietly dropped. A benchmark is the claim a reader is most likely to check, and every compensation number circulating in this market traces to a recruiter survey or a vendor blog. Saying so is not a limitation of the product; it is the product.
Every node serves the fund-economics seat — modeling and negotiating the money split. Process and notification angles belong to SponsorBeast.