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Private Equity and Venture Capital in Europe by Stefano Caselli

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5.4. Carried Interest and Management Fee Scheme: US and UK Systems

The only complete integration of UK countries with the EU framework occurs during the origin of costs and revenues. As described in Chapter 4, vehicles through which investments generate revenue include:

  • Capital gains from investments
  • Dividends and interests from investments
  • Interest from a deposit bank

While costs include:

  • Losses from investment
  • Interest due for loans
  • Management fee to managers[11]
  • Carried interest to managers

11 When considering LPs, the management fee goes to general partners who manage the company.

Considering the case of venture capital funds, revenues to general partners are the

  • Entrance fee from investors
  • Management fee
  • Carried interest ...

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