GP clawback
What if the manager was paid carry it did not earn?
Favours the receiving party
What it does
Trues up distributions across the whole life of the fund, so the manager does not keep carry on early winners when later losses mean the agreed split was never actually reached.
Why it matters
Deal-by-deal carry pays the manager early. Without a clawback that is actually collectible, an investor can end up having paid carry on a fund that did not clear its hurdle overall.
What to watch for
- Clawback calculated net of taxes the manager has already paid, which reduces what comes back
- No security — no escrow, no guarantee, nothing behind the promise
- Obligation resting on an entity rather than on the individuals who received the carry
- Testing only at the end of the fund's life, with no interim true-up
- Distributions to individuals with no joint and several undertaking to return them
What to ask for
- An escrow holding a percentage of each carry distribution until the fund winds up
- Interim clawback testing at defined points, not only at the end
- Personal guarantees from the individuals receiving carry, joint and several
- Gross rather than after-tax calculation, or an agreed assumed tax rate
How common is it
Documents filed with the SEC containing the exact phrase “clawback obligation”.
View as a table
| Year | Documents |
|---|---|
| 2019 | 40 |
| 2020 | 67 |
| 2021 | 90 |
| 2022 | 60 |
| 2023 | 67 |
| 2024 | 85 |
| 2025 | 101 |
Real filings using it
- TPG Inc. (TPG, TPGXL) (CIK 0001880661) — 10-K, 2024-02-23
- Apollo Asset Management, Inc. (CIK 0001411494) — 10-Q, 2023-05-09
- Apollo Global Management, Inc. (APO, APOS, APO-PA) (CIK 0001858681) — 10-Q, 2023-05-09
Source: SEC EDGAR full-text search (efts.sec.gov). Retrieved 2026-08-30. Counts are filed documents matching an exact phrase, not deals, and EDGAR indexes public-company filings — read these as public-company practice, not as evidence of what private mid-market agreements contain.
What usually gets agreed
An escrow of a portion of carry plus after-tax calculation at an assumed rate is the common structure. Interim testing is increasingly agreed; personal guarantees remain heavily negotiated.
Related
- Key person provision — Suspends the fund's investment period if named individuals stop devoting time to it.