ELI5 - What is promote?
[{"id": "erq8qq9", "text": "It's an incentive fee where the GP will get a specified % of the profits beyond a certain point. Generally, LPs will first get all of their invested capital back, plus a preferred returns (kinda like interest), once that's paid back there will be a promote structure and the remaining profit is split accordingly.\n\n&amp;#x200B;\n\nIn a developer model, the promote splits are typically based on the performance of a project. The better the deal does, the biggest share the GP will get. Smart structures will require both IRR and Multiple Hurdles.\n\n&amp;#x200B;\n\nThere are two types of promote \"Against\" and \"After\", but I'm not sure what the difference is between the two.", "replies": [], "depth": 1}, {"id": "erqbs8w", "text": "Share of limited partner profits allocated to general partners.  Typically upside for performance after hurdles but not always.  Also known as carried interest.", "replies": [], "depth": 1}]