Fund Economics

The financial structure of private equity and venture capital funds.

• 2 and 20: Standard fee structure (2% management fee, 20% carried interest).
• Carried Interest: The share of profits paid to the general partners (GPs).
• Hurdle Rate: The minimum return the fund must achieve before GPs receive carry.
• Clawback: A provision allowing limited partners to reclaim carry if later performance dips.