Carried Interest: Can it only be calculated on realized gains?

Can it only be calculated on realized gains?

Can the same gains ever be charged carried interest more than once?

For a hurdle rate, if there are no gains until year 2, do the gains in year 2 have to be greater than 2 years worth of the hurdle rate?

Its unfortunate that the book doesn’t explicitly answer these questions. I find I have to get answers to these questions by doing mock exams and reading the explanation for the answer.

From schweser example it looks like carried interest also recognized on unrealized gains if you are over the hurdle. Think of it like a hedge fund charging a performance fee, they don’t have to sell the investments to collect their performance fee.

The hurdle rate as annual so you would have to be greater than 2 years worth.

In PE we calculate carried interes on NAV before distribution, which contains both realized and unrealized gain.

When it comes to deal-by-deal basis, then I think than PE fund has to actually exit the investment and only then carried interes can be granted to PE.

Can someone confirm this?