The Trillion Dollar Bonus of Private Capital Fund Managers

28 Pages Posted: 5 Jul 2024

See all articles by Ludovic Phalippou

Ludovic Phalippou

University of Oxford - Said Business School

Date Written: June 12, 2024

Abstract

Carry is a performance-related payment made to private capital fund managers (general partners of limited partnerships). Using information on fund performance and key terms of fee structures, we can estimate whether a fund owes or paid some carry (is "in-the-carry") and the total amount (paid and due). We find that as much as 70% of invested capital is in the carry, and funds focusing on Leveraged Buy-Outs and Secondaries are nearly all in the carry (83%, 91%). On aggregate, carry exceeds one trillion dollars (over the last 25 years). Three quarter of the overall carry goes to firms based in the U.S., but less than one third of the money invested comes from the U.S. These findings may contribute to global debates on the taxation of Carry and on new drivers of wealth inequalities.

Suggested Citation

Phalippou, Ludovic, The Trillion Dollar Bonus of Private Capital Fund Managers (June 12, 2024). Available at SSRN: https://ssrn.com/abstract=4860083 or http://dx.doi.org/10.2139/ssrn.4860083

Ludovic Phalippou (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3,432
Abstract Views
7,887
Rank
7,200
PlumX Metrics