Full Definition
Promote (also called carried interest or 'carry') is the sponsor's disproportionate share of profits above a preferred return threshold paid to LPs. Typical structure: 8% preferred return to LPs, then profits split 80/20 (LPs/GP) above that. Promote aligns sponsor incentives with investor returns — sponsors only earn when LPs have been paid first.
Related Terms
Sponsor / Syndicator / General Partner
The principal who organizes a real estate deal, raises capital, and manages the investment on behalf of passive investors.
Limited Partner (LP)
Passive equity investor in a syndicated deal who provides capital but has no operational role. Liability limited to investment amount.