How to Track Carried Interest Clawback as an LP

How to track clawback is an event ledger for potential GP return of excess carry, not a fee schedule and not a tax worksheet. Raziel's management fee and carry tracking page is the fee cash and the Dist: Carry already taken out of a distribution. This page is remaining exposure: carry paid to date, whole-fund or deal-by-deal, escrow if any, the clawback figure the LPA or notice already printed, and the notice date.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed LPA and the notice. Do not invent a clawback formula or a market percentage.

What GP clawback is (and is not)

ILPA's glossary: a clawback obligation is the general partner's promise that, over the life of the fund, the managers will not receive a greater share of the fund's distributions than they bargained for. When triggered, the GP returns to the limited partners an amount equal to what is determined to be excess distributions. ILPA's 2011 Capital Call and Distribution Notice Best Practices: Dist: Clawback is a return of excess carry distributed to the GP, as defined by the waterfall calculation in the LPA, and an offset to Carry. Dist: Carry is the GP's share of proceeds. Put those on different rows.

This is not an LP giveback. The ILPA Model LPA's Limited Partner Giveback is the fund requiring partners to return distributions for indemnification and other fund obligations. GP clawback runs the other way. The 2011 glossary also prints Potential Clawback Value: the amount of clawback payable by the General Partner if the fund was liquidated. Track that as running exposure. Dist: Clawback is the later cash event. Keep both.

Whole-fund vs deal-by-deal changes the clock

ILPA Principles 3.0 (June 2019): the best approach to minimize clawback liabilities is an all-capital-back waterfall. ILPA published two Delaware Model LPAs: whole of fund (October 2019, updated July 2020) and deal by deal (July 2020). Store that type.

The whole-of-fund Model LPA tests clawback on the first anniversary of the end of the Commitment Period, GP removal, liquidation, and any LP Giveback re-advance. If the GP has received more Carried Interest than it should have, or any LP is short of capital contributions plus Preferred Return, the GP must notify Limited Partners in writing within 10 Business Days and contribute to the Fund (firstly out of escrow). The deal-by-deal Model LPA keeps a final clawback at liquidation and adds an interim test: the first anniversary of the end of the Commitment Period and every year thereafter (bracketed in the term sheet), plus GP removal or an LP giveback re-advance. On those dates the GP calculates a hypothetical final distribution at Value that day.

Columns on the event ledger

Open one row per fund, then a new row when Dist: Clawback posts. Do not collapse two vehicles that share a GP brand.

• Carry paid to date. Cumulative Dist: Carry from the notices. The Model LPA year-end pack should confirm Carried Interest distributed. If silent, keep the last printed cumulative. Do not invent a percentage.

• Deal-by-deal vs whole-fund. Copy the LPA section. This field decides whether you diary interim measurement dates.

• Escrow, if any. Balance held, and the deposit rate in the LPA you signed. Principles 3.0: for models other than whole of fund, accrued carried interest should be held in escrow with significant reserves (for example, 30 percent of carry distributions or more). Both Model LPA term sheets bracket a 30 percent deposit until the LP has received aggregate distributions equal to Commitment and Preferred Return. That 30 percent is a template fill-in. Escrow is collateral, not Dist: Clawback.

• Remaining clawback exposure. Copy Potential Clawback Value, potential clawback totals, or the interim calculation the GP sent. Do not invent a formula. Principles 3.0: actual and potential clawback liabilities should be disclosed as of the end of every reporting period. At minimum, annual audited financial statements should include those disclosures and a plan by the GP to resolve the clawback. If the pack is silent, store "not disclosed" and the as-of date.

• Notice date. The date on the letter, plus the as-of date of any quarterly potential-clawback figure. The Model LPA: written notice within 10 Business Days of a clawback occurrence. A Dist: Clawback settlement is a second date. Do not overwrite the potential-exposure row when cash later moves.

Copy the figure. Leave the formula on the notice

The September 2025 Capital Call and Distribution Template Suggested Guidance keeps an optional Supplemental Calculations section for waterfall/carry calculation and clawback questions. If a fund is in a clawback situation, GPs should note whether the amount is gross or net of tax in the Transaction Description field. Copy the label. Do not compute tax. Principles 3.0 wants repayment no later than two years after recognition, and wants the clawback period to extend beyond the term of the fund, including liquidation and any LP giveback. Diary those dates from the LPA.

A workbook holds this if each fund row holds carry paid to date, waterfall type, escrow, remaining exposure copied from the notice, and the notice date. It fails when you haircut NAV by a rule of thumb, treat escrow as already clawed back, apply a whole-fund test date to a deal-by-deal LPA, or skip the row because no Dist: Clawback has posted yet.

Raziel's alternative-asset dashboard is the investment record those events should sit on: cash dates, documents, IRR and MOIC, AI ingest of the notice PDF, capital calls. Raziel does not run the clawback calculation and does not give tax advice. When the next pack prints a potential clawback total, open the row. Leave the LPA math on the notice.