Private Credit Carry

Bump! Anyone?

Bump

Interested

Have a friend who is an MD at a direct lender and was surprised to learn that he does not get carry

there's now a credit forum for this

Very hit or miss. No standard. Some smaller platforms give it to Sr. Associates, and at other places VPs don't get it. Also depends on fund structure, heard some BDCs pay out of quarterly incentive comp. Then you have places like CPPIB etc where I don't think you have traditional PE style funds to pay carry out of. 

People usually focus on cash comp as the incentive piece is not as powerful as PE (but could still be valuable). 

Typically provided at VP and above. Methodology varies widely depending on platform strategy, fund structure, etc. For those with BDCs, the cash distribution component is fairly attractive vs. Euro style arrangements.

My group awarded from asaociate level back when at ~$2bn AUM. Nowadays (~$10bn AUM) from VP level.

Points - depends… 0.25-0.5% at VP level from my personal experience (~$3bn fund).

Actual expected $ amounts significantly lower vs BO shops, but generally faster (if European waterfall) and more predictable.