Brazil’s currency gains implicate carried interest terms

Author: Danielle Myles | Published: 1 Sep 2011

Foreign investors are questioning the fairness of carried interest calculations in Brazilian private equity fund documents.

The pushback, which is coming from sophisticated limited partners, has been sparked by significant appreciation of the real against the US dollar over the past year.

Typically, US investors in Brazilian funds commit in US dollars for real-denominated acquisitions . While these investors receive their initial investment plus minimum rate of return in US dollars, the...