Why carried interest works

Another proposed fix is to make the carried interest tax discount proportional with the amount of money the investment manager puts in up front. Politicians have long threatened to change carried interest rules, but the effort has never succeeded. Trade groups for private equity, hedge fund and other effected industries have fought to keep carried interest as is. Follow him on Twitter ldelevingne.

Skip Navigation. What is carried interest? Only fill in if you are not human. Home Investing Carried Interest. Carried interest: because money managers are too classy for tip jars. Real Estate. Life Insurance. Sign in Sign up. Carried Interest or carry is the share of the earnings that the general owners of hedge funds and private equity funds get as compensation when the funds investments are profitable.

This compensation method is intended to motivate the general partner fund manager to work on improving the fund's performance. Carried Interest is the main source of income for the general partner s of a private equity or hedge fund. Although a small management fee is generally charged to all funds, these fees are only intended to cover the administrative costs of the fund. They do not cover the compensation to the fund manager. Select personalised content. Create a personalised content profile.

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