1. What is Monthly Carry?

Monthly carry represents the portion of carried interest distributed each month, calculated by dividing the annual carry by 12 months. It's commonly used in private equity and hedge fund compensation structures.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Monthly Carry — Amount distributed each month (USD)
• Annual Carry — Total carried interest for the year (USD)

Explanation: This calculation provides an even monthly distribution of the annual carried interest amount.

3. Importance of Monthly Carry Calculation

Details: Calculating monthly carry helps fund managers and investors plan cash flows, manage personal finances, and understand their compensation structure throughout the year.

4. Using the Calculator

Tips: Enter the total annual carried interest amount in USD. The value must be greater than 0.

5. Frequently Asked Questions (FAQ)

Q1: Is monthly carry the same for every month?
A: This calculator assumes equal monthly distributions. Actual carry distributions may vary based on fund performance and distribution schedules.

Q2: How does monthly carry differ from quarterly carry?
A: Monthly carry provides more frequent, smaller distributions compared to quarterly carry which distributes larger amounts less frequently.

Q3: Are there tax implications for monthly carry?
A: Yes, monthly carry distributions are typically taxable income in the month received. Consult a tax professional for specific advice.

Q4: Can monthly carry be negative?
A: No, carried interest is a share of profits and cannot be negative. Losses may affect future distributions but won't create negative carry.

Q5: How accurate is this simple calculation?
A: While mathematically precise, actual distributions may vary based on fund-specific rules and performance hurdles.