Usually, when the investment income exceeds a certain threshold rate of return (the minimum investment return that a limited partner should get), the fund manager can get a certain proportion of excess investment profit according to the agreed carried interest terms. Catch-up clause Catch-up clause is a common clause in private equity investment partnership agreements. After the general partner pays the priority income to the limited partner, it usually enters the catch-up stage of GP investment return. For example, both parties agree in advance on a profit sharing ratio m and a threshold rate of return n. When the actual rate of return r exceeds n, the excess will be fully paid to GP until the ratio of the rate of return obtained by GP to the actual rate of return r reaches m, at which time the actual rate of return r* = n/ 1-m ... After that, if the fund still has excess returns, the income exceeding r * will be distributed in a fixed proportion (for example, LP80%. The callback clause is used to ensure that the carried interest obtained by the general partner will not exceed the agreed proportion.