- **American / deal-by-deal**: carry can be paid after a specific winning exit, even if the rest of the fund has not yet returned all capital.
- **Pros**: earlier GP payouts, better GP cash flow
- **Cons**: more admin complexity, more LP concern, usually needs stronger **clawback** protection if later deals lose money

- **European / whole-of-fund**: LPs get back contributed capital across the **entire fund** first, and sometimes any pref, before GP carry is paid.
- **Pros**: simpler, more LP-friendly, aligns incentives across the portfolio
- **Cons**: GP gets paid later

For most emerging managers, Decile generally favors **European**.
References:
- https://decilehub.com/base/1-general_questions/163749-what-s-the-practical-difference-between-deal-by-deal-and-whole-of-fund-distribution
- https://decilehub.com/base/1-general_questions/163985-what-are-the-practical-differences-between-the-american-and-european-waterfall-structures-for-lp-distributions