Definition
Carry Split
How carried interest is divided when more than one person is responsible for a deal.
A carry split is the allocation of an SPV's carried interest among multiple parties: a lead and a co-lead, a sourcing partner who introduced the deal, an operator who will support the company, or a platform. A lead running a $500,000 SPV at 20% carry who gives away half is left with 10% of profits, so splits materially change the economics of a deal. They are documented either in the operating agreement or in a side agreement between the recipients, and they should be disclosed to LPs because they bear on alignment: an LP is entitled to know whether the person presenting the deal keeps the incentive to steward it. Splits also raise a securities question where the recipient is being paid for introducing investors rather than for work on the deal.