medium · Private Credit fund-structures-returns-economics

In a 'European Waterfall' structure for a private capital fund, when is the General Partner (GP) allowed to receive carried interest distributions?

1. Calling capital is a financing step; carry depends on realized performance, not deployment.
2. The GP only earns carry once fund IRR exceeds the hurdle rate, the minimum return floor owed to LPs.
3. Only after LPs have received back all contributed capital and the preferred return for the whole fund.
4. That describes an American, deal-by-deal waterfall, which lets the GP collect carry earlier than a European one.

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