High Quality Content by WIKIPEDIA articles! Carried interest or carry, in finance, specifically in alternative investment management, is a share of the profits of a successful investment partnership that is paid to the investment manager of the partnership (a private equity fund or hedge fund) as a form of compensation that is designed as an incentive to the manager to maximize performance of the investment fund. In a hedge fund environment, carried interest is usually referred to as a "performance fee". A manager`s carried-interest allocation is in addition to any investment that the manager may have in the private equity fund or hedge fund.