Private Equity

Topic - PE

In calculation of carried interest for a GP when there is a hurdle rate, do we include or exclude unrealised returns?

I remember one example in Schweser (page 91) where they used both realised & unrealised returns before determining whether or not the manager has exceeded the reqd hurdle rate.

However, I just did a CFAI mock - where they excluded it.

Yes, should be considered once you are out of the investment, I don’t remember having see any excercice where they were taking in account unrealize return.