Private Markets
Preferred Return
Definition
What is Preferred Return?
A return that investors generally receive before the manager participates in carried interestA share of fund profits allocated to the manager after contractual conditions are met..
Example in practice
How This Looks in Practice
LPs receive an 8% preferred return before carry is paid.
Keep learning
Related Terms
Private Markets
Private Equity
Investment in privately held companies, often with active ownership and a multi-year exit plan.
Private MarketsVenture Capital
Equity financing for young, high-growth companies with substantial uncertainty.
Private MarketsAngel Investor
An individual who invests personal money in early-stage companies.
Startup InvestingTerm Sheet
A preliminary document outlining the main commercial terms of a proposed investment.