Carry / Carried Interest is a fee paid to maintain the fund an later distribute its profits. The industry standard is referred to as the “2 and 20.” This means that the general partner charges: (a) an annual fee equal to 2% of assets under management plus (b) 20% of the profits of the fund (that is, after the limited partners are paid back their initial investment). The preferred return, when there is one, typically is in the 5-10% range. The 20% sharing of profits is called a “carried interest” and is commonly paid at the end of the life of the fund. If the fund doesn’t become profitable, no carried interest is paid.