i just cant get my head around it i feel lost
there’s another exam CAIA (Chartered Alternative Investment Analyst or some such) some people take as well as CFA, and this topic was discussed in the forum at this site for that exam
How is the catchup rate calculated?
@Ibazer gives a problem
Year1: LP Contributes 50mill. Hurdle is 8%, catchup is full (100%) and carry split is 80/20.
Year2: Investment is sold for 100mill

Year 1: Original cost was $50M
Year 2: Investment sold for $100M, profit $50M
To date: LP $0M, GP $0M, balance $100M 
First the LP get 100% of their contributed capital back,
so they get $50M
To date: LP $50M, GP $0M, balance $50M 
Next the LP get their 8% hurdle,
so they get 8% of the original $50M cost which is $4M
To date: LP $54M, GP $0M, balance $46M 
Next the GP has to catch up. 100% catch up to GP
The split was supposed to be 80/20 and so far the LP has received $4M profit, so the LP will receive $1M for catch up (so the first $5M of profit has been split 80/20 or $4M to LP and $1M to GP)
To date: LP $54M, GP $1M, balance $45M 
The balance of $45M is also split 80:20 so $36M to LP and $9M to GP
To date: LP $90M, GP $10M, balance $0M 
LP get $90M total:
$50M (return of original capital), $4M (8% hurdle), $36M (80% of profit left after hurdle and catch up) 
GP gets $10M total:
$1M (100% catch up of 8% hurdle), $9M (20% of profit after hurdle and catch up)