Fund managers can decide to give their Limited Partners the option to subscribe to their Rolling Fund on either a quarter-by-quarter subscription period or on a multi-quarter subscription period.
For Limited Partners on a quarter-by-quarter subscription period, each quarterly contribution is treated distinctly for the purposes of determining when the Limited Partner begins paying carry. This means that the Limited Partner would only need to be repaid the amount they contributed to any particular quarterly fund before they begin paying carry to the fund manager.
For Limited Partners on a multi-quarter subscription period, all contributions made to any quarterly funds during that subscription period must be repaid before the Limited Partner begins to pay any carry to the fund manager, a mechanic we refer to as “carry crossing” as the carried interest an LP pays is crossed over multiple quarterly funds. If a Limited Partner fails to fully fund across their subscription period, the Limited Partner would lose carry crossing and would begin paying carry once repaid their contribution to any particular quarterly fund.