Do you all get carry in CVs?

Based on the most helpful WSO content, the situation you're describing is not uncommon, especially with the rise of Continuation Vehicles (CVs) in recent years. However, there is no universal standard for how carry is allocated in CVs, and it often depends on the firm's internal policies, culture, and precedent.

Here are some key considerations:

1. Carry Allocation in CVs:

   • It's reasonable to think that those involved in executing the CV deal should receive carry, especially if the same team would have received carry for a similar fund-level deal.
   • However, carry structures for CVs can vary widely. Some firms treat CVs as extensions of the original fund, while others treat them as separate entities with distinct carry pools.

2. Precedent and Firm Culture:

   • If this is your firm's first CV deal, there may not be a clear precedent. This could be an opportunity to advocate for a fair carry allocation policy for CVs moving forward.
   • Firm culture plays a significant role. Some firms are more generous in sharing carry across the team, while others may reserve it for senior leadership or partners.

3. Negotiation Approach:

   • If you decide to raise the issue, frame it as a question rather than a demand. For example, you could ask how the firm plans to handle carry allocations for CVs and whether it will align with the standard fund carry structure.
   • Highlight the fact that the deal was executed by the same team, which supports the argument for incremental carry.

4. Market Practices:

   • While there isn't a strict "market standard" for CV carry, it's worth noting that some firms do allocate carry in CVs to the broader team, especially if the deal required significant effort from non-partners.
   • If you're unsure about what's "off-market," you could discreetly tap into your network or consult peers at other firms to understand how they handle CV carry.

Ultimately, your reasoning is sound—if the team contributed to the success of the CV deal, it seems fair to receive incremental carry. However, the decision will depend on your firm's specific policies and the partners' discretion. If you approach the conversation thoughtfully, it could lead to a positive outcome without appearing off-market.

Sources: Confused about carry at PE Fund, Carry in REPE, First timer introduced to Co-invest + Carry: How to navigate?, Carried interest for Associates / Senior Associates?, Vice President Fund Carry/Equity