PE Clawback Provisions: The Clause That Forces Your GP to Return Carried Interest and How to Evaluate It
TL/DR: A clawback provision forces your general partner to return carried interest already paid out if the fund's overall performance doesn't justify it. Only 78% of US private equity funds use whole-
Tax Treatment of Alternative Investments: Why Your K-1 Arrives in March and Costs You Money
TL;DR Your K-1 from a private equity or real estate fund will not arrive until March 15 at the earliest, and September 15 if the fund takes an extension. That means you will almost certainly need to
The PE Distribution Waterfall: How $100M in Fund Proceeds Gets Divided
The distribution waterfall is the contractual mechanism that determines how every dollar of fund proceeds splits between you, the limited partner, and the general partner. Get this wrong, and a fund t
Clawback Provision in Private Equity: How LPs Get Their Money Back When a Fund Underperforms
TL;DR: 1 in 14 US private equity firms currently owes carried interest back to its investors, according to a study by Upwelling Capital Group. Nearly $80 billion in net asset value sits in funds
General Partner (GP): What Fund Managers Do and How They Get Paid
TL;DR: A general partner (GP) is the fund manager who raises capital, makes investment decisions, manages portfolio companies, and returns profits to limited partners (LPs). In exchange, the GP...
Management Company vs. GP Entity: How Private Fund Managers Structure Their Business
The management company — often called the ManCo — is the operating entity at the center of every private fund structure. According to Carta's overview of private fund structures, the management compan
Carried Interest Explained: How Fund Managers Get Paid and What It Costs You as an LP
Carried Interest Explained: How Fund Managers Get Paid and What It Costs You as an LP TL;DR: Carried interest is the GP's 20% share of fund profits after you get your capital back plus a preferred return. On a $100M...