The GP's share of fund profits — conventionally 20% of profits above an 8% preferred return ('hurdle'), paid through the distribution waterfall after return-of-capital and the GP catch-up tier. U.S. tax treatment: carry has historically been taxed as long-term capital gain (20% LTCG + 3.8% NIIT) rather than ordinary income, subject to a 3-year holding-period requirement post-TCJA (§1061). Subject to clawback at fund termination if cumulative carry distributions exceed 20% of net fund profits.