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Private equity executives are increasingly borrowing against their future profit shares as a prolonged slowdown in the buyout market continues to delay the payouts they would normally depend on.
Requests for so-called carried interest loans are multiplying, a sign that the industry's highest earners are feeling real liquidity pressure even as they sit atop portfolios of unrealised gains.
The Mechanics Behind the Trend Carried interest represents a fund manager's share of investment profits — the primary reward structure for private equity professionals.
Under normal conditions, these payouts are realised when portfolio companies are sold or taken public.
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