What is carried interest?
Carried interest, often called "carry," is a performance-based fee structure that aligns fund managers' compensation with investor returns. At Esinli Capital, we only earn carried interest when your investments generate profits above a predetermined return threshold.
How Carried Interest Works
Performance-Based: Unlike management fees, carried interest is only collected when investments achieve positive returns above the preferred return threshold
Profit Sharing: Carried interest represents a percentage of the profits generated by successful investments
Long-Term Alignment: This structure ensures fund managers are incentivized to deliver meaningful returns over the full investment lifecycle
The Alignment Principle
Carried interest creates powerful alignment between fund managers and investors:
Success Together: We only succeed financially when your investments generate substantial returns
Risk Sharing: Poor performance means no carried interest compensation for the fund manager
Long-Term Focus: Carried interest is typically realized only at exit events, encouraging patient capital deployment
Differential Structure
Esinli Capital employs a differential carry structure, meaning the carried interest rate varies based on factors such as investment size and investor profile. This approach allows us to offer more favorable terms to larger commitments while maintaining alignment across all investor relationships.
Calculation and Payment
Carried interest is calculated on realized gains—actual cash returns from successful exits like acquisitions or IPOs. It's not charged on paper gains or unrealized appreciation, ensuring that performance fees are based on tangible investment success.
Specific carried interest rates and detailed calculation methodologies are available to qualified investors after creating an account and completing accredited investor verification. This ensures appropriate disclosure of all performance fee structures before you make investment decisions.