easy · Private Credit fund-structures-returns-economics
A fund's 'American' waterfall distribution structure is being compared to a 'European' one.
In a year where a fund has $100M in realizations but has not yet returned all $500M of total called capital, how is the carried interest typically treated?
- Both structures require total capital return first
- Carry is paid on a deal-by-deal basis in American waterfalls
- Carry is only paid after the full $500M is returned in American waterfalls
- American waterfalls prohibit deal-by-deal distributions
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