A contractual obligation for the GP to return previously-distributed carry if, on final fund liquidation, cumulative GP carry exceeded 20% of net fund profit: Clawback = max(0, Carry Paid - 0.20 × Total Fund Profit). Two critical design features: (i) net-of-tax clawback (the GP returns post-tax carry since it paid tax on the original distribution, creating a tax-asymmetry shortfall risk for LPs); (ii) GP escrow (some LPAs require a portion of carry to be held in escrow until final liquidation). American (deal-by-deal) waterfalls carry larger clawback risk than European; interim clawback checkpoints mitigate this.