Carried interest

Profit sharing for private equity fund managers, generally around 20% above a rate called “hurdle rate”.

Carve-out

Operation where a division or an economic entity integrated within a larger group is separated. Carve-outs make spin-off transactions very complex.

Cash in/Cash out

Cash invested / cash recuperated.

Closing

Moment or operations through which a transaction is finalized and physical flows (money/share transfers) are executed.

Commitment

Payment or subscription commitment taken by an investor.
The amount of total commitments sets the size of a private equity fund.

Covenant

Clause of a loan contract which, if not respected, can entail early repayment of the loan. In a leveraged transaction like an LBO, the bank covenants correspond to financial ratios which have to be respected by the borrower. The most well known indicators are net debt/EBITDA and interest charge/EBITDA. Covenants allow the lender to require the early repayment of the loan in case the company does not reach its financial targets, even if the repayment schedule was respected that far.