Journal article
The trillion dollar bonus of private capital fund managers
- Abstract:
- Carried interest (“carry”) is the main performance-based component of compensation for private capital fund managers. Using fund-level cash flows and fee terms for more than 12,000 funds, we estimate which funds are in-the-carry and the total amount earned. Aggregate carry exceeds one trillion dollars and accounts for 18% of investor profits, about equal the contractual value-weighted rate of 19%. The difference reflects the role of hurdle rates and the relatively smooth distribution of fund outcomes. Carry is strongly related to both performance and fund size, and past carry is a stronger predictor of future performance than past returns.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Access Document
- Files:
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-
(Preview, Accepted manuscript, pdf, 446.7KB, Terms of use)
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- Publisher copy:
- 10.1287/mnsc.2024.06510
Authors
- Publisher:
- Institute for Operations Research and Management Sciences
- Journal:
- Management Science More from this journal
- Publication date:
- 2026-04-20
- Acceptance date:
- 2025-11-24
- DOI:
- EISSN:
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1526-5501
- ISSN:
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0025-1909
- Language:
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English
- Pubs id:
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2335274
- Local pid:
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pubs:2335274
- Deposit date:
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2025-11-25
- ARK identifier:
Terms of use
- Copyright holder:
- Ludovic Phalippou
- Copyright date:
- 2026
- Rights statement:
- © 2026 The Author(s).
- Notes:
- The author accepted manuscript (AAM) of this paper has been made available under the University of Oxford's Open Access Publications Policy, and a CC BY public copyright licence has been applied.
- Licence:
- CC Attribution (CC BY)
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